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Article
Publication date: 1 October 2005

Konrad J. Farrugia and Peter J. Baldacchino

This paper has the objective of identifying the different types of qualifications in auditor's reports of companies in Malta, the extent of multiple and repeated qualifications in…

2794

Abstract

Purpose

This paper has the objective of identifying the different types of qualifications in auditor's reports of companies in Malta, the extent of multiple and repeated qualifications in such reports and any significant relationships between such main types of qualifications and firm‐specific variables.

Design/methodology/approach

The study in this small Mediterranean island is designed to investigate the auditor's reports of 419 companies in the period 1997/2000. This is also complemented by an analysis of 12 interviews held with audit partners in different practices.

Findings

Results show that 19.9 per cent of sampled companies had a qualified auditor's report. The most common type of qualification was that of limitation‐on‐scope found in small companies and issued by non‐Big Four audit firms. Small companies were also prone to going concern qualifications in view of their more common net liability situations. Disagreement‐with‐management qualifications were found to be more likely in larger companies and to be mostly issued by Big Four audit firms.

Research limitations/implications

The methodology adopted by the study may also be used in similar future studies in other small states and further research could possibly be undertaken on the motivation behind the issuance of such qualifications.

Originality/value

The study concludes that Maltese companies, which are as yet all required to be audited irrespective of size, have an apparently high rate of audit qualifications and also that the auditor's reports of non‐Big Four audit firms are often deficient or even incompatible with the wording of the International Standards on Auditing.

Details

Managerial Auditing Journal, vol. 20 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 10 April 2017

Mondher Fakhfakh

The purpose of this paper is to examine the level of harmonization of auditors’ reports issued by independent auditors of Islamic banks.

Abstract

Purpose

The purpose of this paper is to examine the level of harmonization of auditors’ reports issued by independent auditors of Islamic banks.

Design/methodology/approach

The homogenization of the auditors’ reports of Islamic banks has been statistically measured. Supranational auditing standards on auditors’ reports (ISA 700 and AAOIFI standard) are used as the control.

Findings

The results show lack of harmonization in several elements related to the form of the auditor’s report and in all elements related to the content of the auditor’s report among the Islamic banks.

Originality/value

This paper provides new empirical evidence about the measurement of harmonization in the form and content of the auditors’ reports of Islamic banks. It discusses the level of compliance with the elements enumerated by the standards issued by the International Federation of Accountants and the Accounting and Auditing Organization for Islamic Financial Institutions.

Details

Journal of Islamic Accounting and Business Research, vol. 8 no. 2
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 1 July 2020

Ahmad Abdollahi, Yasser Rezaei Pitenoei and Mehdi Safari Gerayli

The present study sets out to examine the effect of auditor's report and audit firm size on the value relevance of accounting information of the companies listed on the Tehran…

1488

Abstract

Purpose

The present study sets out to examine the effect of auditor's report and audit firm size on the value relevance of accounting information of the companies listed on the Tehran Stock Exchange during the years 2008–2017.

Design/methodology/approach

The study includes a sample of 1,530 firm-year observations drawn from the listed companies, and the research hypotheses were analyzed using multivariate regression model based on panel data.

Findings

The findings reveal that auditor's report and audit firm size are positively and significantly correlated with two indicators of the value relevance of accounting information including value relevance of earnings and book value per share. Also our results exhibit robustness to the alternative measure of auditor's attributes.

Research limitations/implications

As far as we know, this is the first study to analyze the association between auditor's attributes and value relevance of accounting information in emerging capital markets, thereby generating certain implications for investors, managers, capital market policy makers and audit profession regulators in general and those in emerging markets in particular.

Practical implications

Our findings have implications for policy makers, regulators, managers and investors. Our evidence on the positive association between auditor's size and value relevance of accounting information should help policy makers and regulators which they improve value relevance of accounting information and financial reporting by integrating small audit firms and setting up larger audit firms.

Originality/value

A rise in the value relevance of accounting information deserves further attention while drawing investment, selling the stocks of existing firms and increasing investor's decision-making ability. The way how auditor's attributes can promote the value relevance of accounting information is still open to new research.

Details

Journal of Applied Accounting Research, vol. 21 no. 4
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 29 January 2020

Mondher Fakhfakh

The purpose of this paper is to examine the level of harmonization of consolidated auditors’ reports issued by the independent auditors of Islamic banks.

Abstract

Purpose

The purpose of this paper is to examine the level of harmonization of consolidated auditors’ reports issued by the independent auditors of Islamic banks.

Design/methodology/approach

A statistical measurement of the homogenization of the consolidated auditors’ reports of Islamic banks. International and Islamic auditing standards on consolidated auditors’ reports are used as the control (ISA 700 and AAOIFI standard-IAS2).

Findings

The results show a lack of harmonization among the Islamic bank’s groups in several elements related to the form of the consolidated auditor’s report and in all elements related to the independent auditor’s report.

Originality/value

This paper provides new empirical evidence about the measurement of harmonization in the form and content of the consolidated auditors’ reports of Islamic banks groups. It discusses the level of compliance with the consolidated elements enumerated by the standards issued by the International Federation of Accountants and the Accounting and Auditing Organization for Islamic Financial Institutions.

Details

Journal of Islamic Accounting and Business Research, vol. 11 no. 3
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 10 April 2007

Mondher Fakhfakh and María Consuelo Pucheta‐Martínez

The purpose of this paper is to examine the form and content of auditors' reports published by international accounting firms in Tunisia.

Abstract

Purpose

The purpose of this paper is to examine the form and content of auditors' reports published by international accounting firms in Tunisia.

Design/methodology/approach

Compliance measurement of auditor's report published by Tunisian auditors who represent international auditing firms with International Standard on Auditing 700 (ISA700).

Findings

Audit reports examined are not fully compliant with all elements of the report issued by the International Federation of Accountants (IFAC).

Originality/value

The paper provides empirical evidence for limitation of standardisation efforts on auditors' reports and discusses the implications for accounting firms and their clients.

Details

Journal of Human Resource Costing & Accounting, vol. 11 no. 1
Type: Research Article
ISSN: 1401-338X

Keywords

Abstract

Details

Quality Control Procedure for Statutory Financial Audit
Type: Book
ISBN: 978-1-78714-226-8

Article
Publication date: 5 September 2008

Hamadi Fakhfakh, Mondher Fakhfakh and María Consuelo Pucheta‐Martínez

The purpose of this paper is to examine the impact of the new, revised International Standard on Auditing (Revised ISA700) in terms of the wording characteristics of Tunisian…

1993

Abstract

Purpose

The purpose of this paper is to examine the impact of the new, revised International Standard on Auditing (Revised ISA700) in terms of the wording characteristics of Tunisian auditors' reports.

Design/methodology/approach

Measurement of the compliance of auditors' reports issued by Tunisian auditors with the new revised International Standard on Auditing (Revised ISA700).

Findings

It was found that the audit reports examined are not fully compliant with all the elements enumerated by the new standard issued by the International Federation of Accountants (IFAC).

Originality/value

This paper provides new empirical evidence about the level of compliance with the revised ISA700. It discusses the limits on standardisation efforts for national auditors' reports, and the implications for accounting firms and their audit clients.

Details

Managerial Auditing Journal, vol. 23 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

Book part
Publication date: 15 November 2021

C. Richard Baker and Martin E. Persson

In this chapter, we study the evolution of the auditor’s report from its emergence more than 150 years ago to the present. During this period, the standard auditor’s report has…

Abstract

In this chapter, we study the evolution of the auditor’s report from its emergence more than 150 years ago to the present. During this period, the standard auditor’s report has evolved from a rudimentary form to its current and more sophisticated structure with a clearly defined title, addressed to specific entities, and systematically divided into sections that are meant to highlight certain aspects of the audit examination. We describe the major events that have affected the financial reporting environment in the United States and, in turn, how these events have transformed the auditor’s report over the last century. As will be demonstrated in the chapter, the progression of the presentation of the auditor’s report, from being a certification to the standard report of the present day, has been guided primarily by the kind of information that investors and creditors wanted to know in relation to their investments in public companies. However, the desire for that information was often influenced by periodic incidents of corporate scandals. These scandals made it imperative that a monitoring mechanism was established to maintain the confidence of investors and creditors in the reporting of financial information about companies and the overall functioning of the capital markets.

Details

Historical Developments in the Accountancy Profession, Financial Reporting, and Accounting Theory
Type: Book
ISBN: 978-1-80117-805-1

Open Access
Article
Publication date: 14 December 2022

Mahdi Salehi, Tamanna Dalwai and Arash Arianpoor

The present study aims to assess the impact of narcissism, self-confidence and auditor's characteristics on audit report readability for companies listed on the Tehran Stock…

2497

Abstract

Purpose

The present study aims to assess the impact of narcissism, self-confidence and auditor's characteristics on audit report readability for companies listed on the Tehran Stock Exchange.

Design/methodology/approach

The study’s statistical population comprises firms listed on the Tehran Stock Exchange. The present research used a systematic elimination method, and 1,162 firm-year observations were obtained for seven years from 2012 to 2018. Three variables including auditor tenure, audit fee and audit specialization are used for measuring auditing features. The Fog index is used as a proxy for measuring audit report readability. In addition, in this paper, four regressions, including fixed effects, random effects, pooled and T+1, are used to estimate reliable coefficients.

Findings

The findings show a negative and significant relationship between auditor’s characteristics (tenure, fee and specialization) and audit report readability. Moreover, the variables of the auditor’s narcissism, self-confidence and mandatory auditor change have a positive and significant association with audit report readability. This study lends support to the theories of personality disorder and behavioral decision.

Originality/value

Since narcissism and self-confidence are two characteristics that shape an individual’s character and personality, some involved behavioral factors in auditors’ characteristics contribute to their decisions. The effects of these should be detected to enhance the decision-making process. The said factors significantly impact audit report readability. Hence, this paper attempts to assess the effect of the said factors on audit report readability.

Details

Arab Gulf Journal of Scientific Research, vol. 41 no. 2
Type: Research Article
ISSN: 1985-9899

Keywords

Article
Publication date: 5 October 2021

Jalil Khaksar, Mahdi Salehi and Mahmoud Lari DashtBayaz

This paper aims to analyze the relationship between the following auditor's characteristics with detecting frauds in the listed companies on the Tehran Stock Exchange.

1890

Abstract

Purpose

This paper aims to analyze the relationship between the following auditor's characteristics with detecting frauds in the listed companies on the Tehran Stock Exchange.

Design/methodology/approach

A multiple regression model is used to test the research hypothesis. The hypothesis was further tested with a sample of 187 companies listed on the Tehran Stock Exchange (1,309 observations) from 2012 to 2018 and by using multiple regression models based on panel data and the random-effects model.

Findings

The results suggest a positive and significant relationship between audit firms' size, auditor rotation, specialization in the industry, the audit market's focus, auditor's independence, audit report lag and renewal of financial statements with fraud detection. The results revealed a significant relationship between the period of auditor tenure, auditor's narcissism, audit fees and the type of auditors' opinion (un-qualified opinion) with fraud detection.

Originality/value

As the present study is a pioneer in examining this issue in the emerging markets, it provides users, analysts and legal entities with useful information about auditor characteristics that significantly affect the fraud detection of financial statements. The results mitigate the literature gap and improve knowledge in this area.

Details

Journal of Facilities Management , vol. 20 no. 1
Type: Research Article
ISSN: 1472-5967

Keywords

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