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The purpose of this paper is to describe, illustrate and provide a deeper understanding of team composition and labor allocation in audit teams by quantifying the exact value of resources at different levels of the audit production. Audit teams have been considered as a black box in audit research. Therefore, this paper reports descriptive statistics on (levels and proportions of) hours and costs allocated to auditor ranks (and the number and value, i.e. billing rates, of auditors for different ranks and the entire team) to shed new light on audit teams.

This study uses a proprietary data set containing disaggregated information on hours, costs and billing rates for each team member in each of 908 audit engagements. The data are provided by a Swedish Big 4 audit firm. The study uses a purely descriptive approach and categorizes auditors into seven ranks. As size and the publicly listed status are crucial determinants of audit production, the paper splits engagements in public and private companies and reports statistics for size quartiles of both public and private clients.

The paper provides descriptive statistics for (1) client size, (2) audit team members, (3) audit hours, (4) audit costs, (5) proportion of audit hours, (6) proportion of audit costs, (7) billing rates and (8) variation of billing rates. Results show that compared to private clients, the audit firm allocates higher effort from auditors in higher ranks and lower effort from auditors in lower ranks to public clients. Another finding is that allocation varies with client size for private clients, but less so for public clients.

In an area with sparse literature, this descriptive study serves as a first step to improve our understanding and guide future research. It provides concrete support for previously known theory.

Auditors' employment with their former audit clients has been an issue of concern to regulators and accounting bodies because of its perceived effect on auditor independence. Little prior research examines this issue and the results are mixed. This paper is motivated by the lack of research on the impact of certified public accountings (CPAs) employment with former audit clients on auditor independence, particularly in the Asia Pacific region in the post‐Enron climate.

This research is the first study of its type in the literature using both qualitative and quantitative analysis. The framework of the study is formed by the identification of gaps in the literature and semi‐structured interviews. Two within‐subjects independent variables – “auditors of different ranks” (rank factor) and “former auditor's direct prior professional relationship with the client” – and one between‐subject independent variable – “Big 4” CPAs vs non‐Big 4 CPAs – are examined. Mixed analysis of variance (ANOVA) are employed to analyze survey responses from 205 “Big 4” and 196 “non‐Big 4” auditors.

The rank factor has a significant influence on the perceptions of auditor independence. Perceived independence is impaired when a senior level professional such as partner or manager joins a former audit client, and revokes an US study conducted in the pre‐Enron. Perceived independence is also impaired when the former auditor has a direct prior professional relationship with the former audit client. Results further indicate that when the former manager who has direct prior professional relationship with the client and then joins the audit client, independence is severely impaired.

The results of this paper could help to establish an effective standard that deals with the employment/independence situations in the local auditing environment.

This rich descriptive study examines auditors' client risk assessment (i.e. “key audit matters”/critical audit matters) disclosures in expanded audit reports of 328 Financial Times Stock Exchange (FTSE) 350 companies. The study compares auditor-identified client risks with corporate risk disclosures identified in audit committee reports, in terms of number and type of risks. The research also compares variation in auditor-identified client risks between individual Big 4 audit firms. In addition, the study examines auditor ranking of their client risks disclosed.

The study manually content analyses disclosures in audit reports and audit committee reports of a sample of 328 FTSE-350 companies with 2015 year-ends.

Audit committees identify more risks than auditors (23% more risks). However, auditor-identified client risks and audit-committee-identified risks are similar (80% similar), as are auditor-identified client risks between the individual Big 4 audit firms. Only ten (3%) audit reports rank the importance of auditor-identified client risks.

Sample is restricted to one year, one jurisdiction, large-listed companies and companies audited by Big 4 auditors.

The study provides important insights for regulators, auditors and users of financial statements by identifying influences on disclosure of auditor-identified client risks.

The paper mobilises institutional theory to interpret the findings. The findings suggest that auditor-identified client risks in expanded audit reports may demonstrate mimetic behaviour in terms of similarity with audit-committee-identified risks and similarity between individual Big 4 audit firms. The study provides important insights for regulators, auditors and users of financial statements by identifying influences on disclosure of auditor-identified client risks.

The purpose of this paper is to investigate the perceptions of auditor independence between auditors, bank‐loan officers, and financial analysts in Bahrain.

This study examines the effect of 41 independence‐enhancing and – threatening Factors on the perceptions of auditor, bank‐loan officers, and financial analysts regarding auditor independence in Bahrain. Out of 450 questionnaires distributed, 281 usable responses were received, representing a response rate of 62.4 percent.

Overall, the three groups agree on the classification of the 41 factors into two groups; however, they do not agree on the relative importance of those factors on their perception of auditor independence. Economic reliance of auditors on their clients and the provisions of non‐audit service, competition, and long tenure of audit services are considered the most important independence‐threatening factors. The risks posed to auditors in fulfilling their audit engagement, regulatory rights and requirements surrounding auditor change, regulation concerning the appointment/remuneration of auditors, and the disclosure of financial and nonfinancial relationships are among the most important factors that are perceived by the three groups to enhance auditor independence.

The samples did not include all users of financial statements; the samples were drawn only from institutions that were willing to take part, and consequently the results might not be applicable to those that did not take part in the study; and data were collected using a survey questionnaire and this approach is subject to certain types of bias such as response bias, which may affect the reliability of the respondents' answers.

The paper can inform policy makers, governments, and professional accounting bodies in emerging markets in countries that share similar economic, political, and cultural environment on how policies and frameworks related to auditor independence can be structured to ensure adequate regulation of the capital market, and enhance the awareness of users and auditors about the contextual factors surrounding the role of an auditor, in addition to the possible threats and enhancing factors that affect auditor independence.

The paper offers rich data on the perceptions of auditors' independence of auditors and users of financial statements. This is the first time, this type of research has been conducted in Bahrain.

This research examines the effect of auditors’ personal debt on their audit decision making. We developed two different background scenarios that vary the level of the auditor’s personal debt. While one scenario indicated that the partner lived a modest lifestyle and was relatively free of debt, the other indicated that the partner lived an expensive lifestyle and had considerable personal debt. Our data indicate that auditors receiving the higher personal indebtedness scenario were more likely to believe that the auditor in the case study would sign-off on the audit without doing any additional work. We also found that the propensity to believe that the auditor in the case study would sign-off on the audit without doing any additional work decreased as the participants’ rank within the firm increased. Our research documents that a partner’s level of indebtedness could influence the participant’s audit decisions.

Though assurance services framework has been defined in the Auditing Standards, the understandability of the concept of reasonable assurance are varied by different auditors. The audit risk model (ARM) that is being used on a worldwide basis to underpin the audit risk of companies, is often being criticized. The purpose of this paper is to assess auditors' perceptions of reasonable assurance in audit work and the effectiveness of the ARM.

Three independent variables are examined: CPA certification, ranks of auditors and gender for their influence on two dependent variables: the perceptions of reasonable assurance in audit work and the effectiveness of the ARM. MANOVA analysis and follow up Discriminant Analysis are employed.

Results reveal that there are significant differences between the perceptions held by auditors of different ranks regarding reasonable assurance in audit work. Partners entertain higher perceptions of reasonable assurance than staff auditors. The “gender” variable does not have an influence on the two dependent variables. Auditors with CPA certifications have higher perceptions of reasonable assurance. There are no differences in the perceptions ratings by different rank of auditors, gender and CPA certifications on the effectiveness of the ARM. The three independent variables have average high‐mean ratings on the effectiveness of the ARM, confirming that the current ARM still can provide an effective assurance.

This empirical study revokes the UK study and The Netherlands study. Immediate attention need not be focused on restructuring the ARM. Future contemplation of other important issue such as auditor independence may be considered.

Perceived independence is one of the corner‐stones in auditing theory. Despite prior research on auditor independence, the results are inconclusive. The lack of research in the Hong Kong auditing environment motivates this study, particularly following the Enron débâcle. The purpose of this paper is to examine the non‐audit services (NASs), competition, rank and types of auditors, in respect of the independence problem as it relates to the practices of Hong Kong auditors in the post‐Enron environment.

Four independent variables identified from literature gaps are examined, namely NASs, levels of competition, auditors of different ranks and types of auditors. Mixed ANOVA are employed to analyze survey responses from 207 “Big 4” and 185 “non‐Big 4” auditors.

Results of the study show that the provisions of NASs and high competition could have a negative influence on auditors' perceptions of independence. Second, auditors' perceptions that the influence of NASs on independence depends on an individual auditor's rank are supported. Senior managers have the highest mean rating on perceptions, while partners have the lowest mean rating. Results support the agency theory that the agent (senior manager) may not always act in the best interests for the principal. Finally, there is no difference between Big 4 and non‐Big 4 auditors' perceptions of the influence of NASs and competition on independence.

The study revokes earlier US research that indicates that NASs provisions favorably influence auditors' perceptions of independence. It would be advantageous for a regulatory body to reconsider professional reforms such as prohibitions of NASs and the repercussions of non compliance of independence.

This study investigates the consistency of Jordan's certified public accountant examination, and its agreement with professional viewpoints regarding the relative importance of examination topics. The study examines the grades of 15 consecutive examinations and surveyed 156 auditors and 31 examination committee (EC) members. The results indicate that the rankings of examination topics derived from the examination grades are different from the ranks of these topics in auditors and EC members' responses. The 15‐examination period was divided into four sub periods to test the consistency of the examinations. The rankings of the examination sub periods were also different. These results suggest that the Jordanian Board of Audit Profession (BAP) should maintain the consistency of the examinations. To achieve this target, the BAP should prepare and use a content specification outline to enable candidates to prepare better and to direct the efforts of the examination committees.

This study investigates the perception of professionals in the field of accounting, and those associated with forensic auditing, about the knowledge and skills, experience and technique that a forensic auditor should possess to provide high-quality services in fraud detection. The study also shows the impact of forensic auditing tools on fraud detection.

With the use of a self-administered questionnaire, the study adopts a survey design in which 298 respondents participated. Data were subjected to descriptive statistics (ranking, mean and standard deviation), inferential statistics (binary logistic regression and ordinary least square regression).

The findings indicate that adequate knowledge of economic damage calculation and financial statement valuation is essential for forensic auditors' service. The results also reveal that forensic auditor skills and techniques is a significant predictor for fraud detection in the Nigerian public sector.

The paper draws attention of the federal government parastatals to the need to improve their internal control system to reduce the fraudulent practices in their parastatal. The study also draws the attention of the Nigeria University Commission and the Institute of Chartered Accountants of Nigeria on the needs for revision of the accounting curricular for the training of accounting graduates and professional accountants in Nigeria.

The paper is of importance to other developing nation as it provides empirical evidence on the needs to do periodic forensic audits of government corporations.

With the persistent increase in the number of fraudulent cases, current views of those associated with forensic auditing (judiciaries, parastatals, forensic auditors and academics) on mechanisms for timely detection of fraud are needed.

The purpose of this paper is to examine the relationship between auditors' perception of their firm's tone at the top and attributes of their professional environment and their job satisfaction.

Research hypotheses are developed based on prior research including research on social judgment theory. Structural equation modeling is used to analyze the data collected through a survey of auditors.

The results show that the tone at the top affects job autonomy and organizational‐professional conflict. Each of these variables directly or indirectly affects job satisfaction. This paper also provides evidence that the tone at the top filters down to at least the senior rank.

Limitations include the usual caveats associated with the survey method. Notwithstanding these limitations, the results suggest that a tone at the top that emphasizes audit effectiveness may not only improve the quality of today's audits, but by improving job satisfaction have long‐term benefits for audit firms' culture.

This paper empirically measures “tone at the top” and it shows that a tone at the top emphasis on audit effectiveness is consistent with auditors' own professionalism and may not only improve the quality of today's audits, but by improving job satisfaction have long‐term benefits for audit firms' culture.