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1 – 10 of over 2000Elina Elisabet Haapamäki and Juha Mäki
The purpose of this paper is to investigate the comment letters (CLs) in the standard-setting process of audits of less complex entities (LCEs). The objective is to gain insight…
Abstract
Purpose
The purpose of this paper is to investigate the comment letters (CLs) in the standard-setting process of audits of less complex entities (LCEs). The objective is to gain insight into the overall picture of the CLs and to report on areas where comment providers agree or disagree with IAASB's Part 10.
Design/methodology/approach
A content analysis of 60 comment letter (CLs) was conducted to investigate the suggested additional Part 10 on audits of groups' financial statements in the proposed ISA for LCEs. Hence, this study examines three specific topics: (1) the views related to the use of the International Standard on Auditing (ISA) for LCEs for group audits in which component auditors are involved, (2) the proposed group-specific qualitative characteristics to describe the scope of group audits and, finally, (3) insights into the content of the proposed Part 10 and related conforming amendments. The Gioia method is used to provide a holistic approach to concept development of the arguments about the new Part 10.
Findings
The CLs stated that, while the proposed Part 10 has some weak points, it still provides a solid and practical structure within which to undertake an LCE group audit and a promising basis for further development. For instance, when discussing the improvements, the CLs stated that Part 10 should allow for more auditor judgment when determining when the involvement of component auditors renders a group audit complex. In addition, the CLs asserted that professional judgment should be engaged when considering the qualitative characteristics and the complexity of the group.
Originality/value
This study contributes to the very scarce research about the ISA for LCEs and the role of lobbying in shaping the audit standard-setting process.
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Elina Elisabet Haapamäki and Juha Mäki
The objective of this paper is to extend the debate on audit quality in the less complex entity (LCE) context by analyzing comment letters submitted to the International Auditing…
Abstract
Purpose
The objective of this paper is to extend the debate on audit quality in the less complex entity (LCE) context by analyzing comment letters submitted to the International Auditing and Assurance Standards Board (IAASB). The IAASB has drafted a new, stand-alone standard for audits of LCEs’ financial statements.
Design/methodology/approach
The Gioia method is utilized to conduct the qualitative analysis. This enables the material to shine and provide a comprehensive picture of the important aspects of the comment letters about the International Standard on Auditing (ISA) for LCEs. A content analysis of the 145 comment letters is conducted to identify the extent of the support for and the arguments against the new, stand-alone draft standard for audits of LCEs’ financial statements. In addition, this study considers how the comment letters describe the respondents’ views on audit quality in relation to the new standard. Finally, the tone of the comment letters and audit quality arguments is investigated.
Findings
The findings provide a useful framework of the most frequently used arguments supporting and opposing the ISA for LCEs. Within the themes identified, a wide variety of issues and concerns are discussed. The results reveal that the arguments in the comment letters are contradictory. For instance, when discussing audit quality, those interest groups that perceived many positive opportunities in the adoption of the ISA for LCEs thought that the audit quality would increase. Conversely, those interest groups that were skeptical about the success of the ISA for LCEs argued that the audit quality could be compromised by the general prejudice that the ISA for LCEs might be perceived as a lower-quality audit with fewer procedures.
Originality/value
This paper is, to the best of the authors’ knowledge, the first to examine the content of comment letters in the context of a new, stand-alone standard for audits of LCEs. The international audience can utilize the results in the context of the widely discussed issue of reducing LCEs’ auditing obligations. This study aims to contribute to the two streams of accounting literature concerning audit quality and political lobbying.
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Marion Pauline Gauthier and Nathalie Brender
Blockchain is expected to impact reporting and auditing processes. Indeed, the increasing use of blockchain could affect the nature and extent of information available to auditors…
Abstract
Purpose
Blockchain is expected to impact reporting and auditing processes. Indeed, the increasing use of blockchain could affect the nature and extent of information available to auditors and how audits are performed. This paper aims to investigate how auditors are assessing the relevance of the current auditing standards in light of the emergent use of blockchain technology.
Design/methodology/approach
Based on qualitative content analysis, this paper analyzed semi-structured interviews with auditors to understand their shared perception of how the current auditing standards address blockchain’s emergence.
Findings
The findings reveal a growing demand for information technology (IT) auditing standards, as well as a mismatch in timing between the quickly changing IT environment and the regulators’ slowness in releasing new standards or updating standards.
Research limitations/implications
The findings reflect the external auditors’ points of view and cannot be generalized to all countries, but future studies should address the development of specific IT-related auditing standards to better fit the fast-evolving technology environment in ways that consider the other stakeholders’ points of view, including those of the standard setters.
Practical implications
The results of this study show that auditors consider the current auditing standards for IT to be too vague, and they need more guidance on both auditing blockchain and using technologies as audit tools.
Originality/value
The original contribution of this study lies in the in-depth understanding it provides of the adequacy of the current auditing standards to audit companies using blockchain, which is an under-researched topic.
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The purpose of this study is to provide fresh insights into whether there is an expectation gap between external auditors' and other stakeholders' perceptions of external…
Abstract
Purpose
The purpose of this study is to provide fresh insights into whether there is an expectation gap between external auditors' and other stakeholders' perceptions of external auditors' responsibilities in an emerging economy, in light of recent changes to the global audit landscape.
Design/methodology/approach
A quantitative approach in the positivistic paradigm was adopted, and a structured questionnaire was used to gather data.
Findings
The findings suggested that there was a statistically significant discrepancy between external auditors' and social groups' perceptions of the responsibilities of external auditors. More than half of the gap was due to deficiency in standards, 19% due to unreasonable expectations by society, while 25% of the gap was found to be due to deficient performance.
Research limitations/implications
The study focused on the duties of external auditors and not on the duties of other types of auditors while examining the audit expectation-performance gap (AEG), and this was due to the drastic differences in the scope of their duties.
Practical implications
The findings of this study are likely to have direct policy implications for regulators, authorities, educators and auditing professionals, who should take immediate actions and measures to reduce the AEG in light of the current global audit landscape advancements and changes.
Originality/value
The present study used a substantially updated model to measure the AEG to suit the contemporary changes in the auditing landscape, and could be considered as a pioneering study that measures the AEG in an emerging economy amid recent changes.
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Fatah Behzadian and Naser Izadi Nia
In this research, using an analytical framework on factors affecting the quality of auditing services, we consider factors that affect an expectations gap in providers and users…
Abstract
In this research, using an analytical framework on factors affecting the quality of auditing services, we consider factors that affect an expectations gap in providers and users of auditing services related to factors affecting auditing quality. Effective factors studied in this regard are professional features, including the professional role of individuals in the auditing process (auditors against preparers of financial statements), professional experience of individuals, professional rating and size of auditing firms. The first statistical society consists of certified public accountants (CPAs) working in the auditing organization and audit firms in Iran, and the second statistical society consists of all investment companies that operate under the supervision of the Tehran Stock Exchange Organization. Based on the results of the research, the role of professionals in the auditing process is not effective as an independent auditor or financial statements provider, as well as the professional experience of individuals in the expectations gap from factors affecting auditing quality, while the size and qualities of the auditing firms were influenced by the expectations gap of individuals in the field of auditing regulation.
Latifah Algabry, Syed Musa Alhabshi, Younes Soualhi and Omar Alaeddin
The main purpose of this research is to figure out the most effective determinants that play a vital role in enhancing the effectiveness of the internal Sharīʿah audit in the…
Abstract
Purpose
The main purpose of this research is to figure out the most effective determinants that play a vital role in enhancing the effectiveness of the internal Sharīʿah audit in the Islamic banking industry.
Design/methodology/approach
This paper reviews the existing literature to build comprehensive knowledge that would assist in determining the main factors that impact on the effectiveness of Sharīʿah audit in Islamic banks.
Findings
This research proposes a conceptual framework of factors that impact on Sharīʿah audit effectiveness in IBs based on previously published studies. The proposed framework includes external and internal factors as well as internal Sharīʿah audit structure, process and requirements.
Practical implications
First, the regulators need to provide a detailed framework for Sharīʿah audit which covers the main requirements for effective Sharīʿah governance. Second, Islamic financial institutions (IFIs) need to pay more attention to following the Sharīʿah audit process in order to achieve the objective of effective Sharīʿah governance. Finally, the dearth of empirical research on the role and effectiveness of Sharīʿah audit in Islamic banking highlights the need to develop an appropriate methodology to enhance the study of the effectiveness of Sharīʿah governance practices.
Originality/value
The Sharīʿah ensures compliance with its rules and regulations and enhances the soundness and credibility of the Islamic finance industry. This study identifies a number of issues that require further investigation in order to establish a better system of Sharīʿah audit and to identify the factors that affect Sharīʿah auditing practices. This paper is unique in covering the main elements that have influence on the effectiveness of Sharīʿah audit and proposes them in one framework.
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