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This study aims to investigate the moderating effect of the COVID-19 epidemic on the relationship between key audit matter (KAM) and auditing quality.

The authors use the ordinary least squares regression on data from 942 firm-year observations of Jordanian non-financial institutions across the period (2017–2022) to test the hypotheses. The authors use content analysis method to measure levels of KAM disclosure.

The investigation’s findings highlight the importance of KAM disclosure in achieving audit quality in line with international standard on auditing no. 701 (ISA-701) requirements. COVID-19 is also found to have a positive relationship with audit quality, further confirming the crisis’s devastating impact on audit complexity and risks and providing evidence for the need for supplementary, high-quality audit services. Due to the correlation between KAM disclosure and increased auditor workload and responsibility, the analysis reveals that the COVID-19 factor strengthens the link between KAM disclosure and audit quality.

This study has the potential to be used as a basis for the creation of a new regulation or standard regarding the reporting of unfavourable events in financial filings. This study’s findings provide standard-setters, regulators and policymakers with current empirical data on the effects of implementing ISA-701’s mandate for external auditors to provide more information on KAM. The COVID-19 crisis offers a suitable setting in which to examine the value of precautionary disclosures in times of economic uncertainty, as well as the significance of confidence interval disclosures and the role of external auditing in calming investor fears. This analysis is helpful for stakeholders, regulatory agencies, standard-setters and readers of audit reports who are curious about the current state of KAM disclosures and the implementation of ISA-701. The results may have ramifications for academia in the form of a call for more evidence expanding this data to other burgeoning fields to have a clear explanation of the real impact of reporting KAM on audit practices.

To the authors’ awareness, this research is one of the few empirical studies on the effect of the COVID-19 crisis on auditing procedures, and more specifically, the effect of disclosures on KAM by external auditors on audit quality. This study’s findings represent preliminary scientific evidence linking the pandemic to business performance. Minimal research has been done on how auditors in developing nations react to pandemic investor protection and how auditors’ enlarged reporting responsibilities affect them. The vast majority of auditing studies have been conducted in a highly regulated system, so this research contributes by examining audit behaviour in a weak legal context.

The importance of auditors blowing the whistle when they encounter a situation of perceived wrongdoing cannot be overstated. Unfortunately, however, the initial report of wrongdoing is often insufficient to remedy the situation. Thus, this chapter investigates auditors’ whistleblowing persistence, measured as the number of times an auditor is willing to repeatedly report the wrongdoing, if he/she is not satisfied with the initial and/or subsequent responses received. Specifically, this chapter examines auditors’ persistence when reporting the wrongdoing of a peer auditor on the same audit team. Results show communication medium utilized within the audit team (instant message vs video) and client importance (high vs low) influence persistence in a 2 × 2 experiment. The manipulation for communication medium uses actual prerecorded videos and instant messages. Results related to one of our four hypotheses show that whistleblowing persistence is affected by client importance; that is, auditors are more likely to persist in reporting when working on a less important client. Furthermore, the findings suggest that client importance and communication medium interact such that communication medium affects persistence on more important clients, but not less important clients. Specifically, when working on a more important client, auditors are more likely to persist in reporting when interacting with their peers via video compared to via instant message. Given that whistleblowing persistence is often necessary to obtain a satisfactory resolution to the issue at hand, our results suggest avenues to encourage whistleblowing persistence should be further explored.

The purpose of this paper is to garner a deeper understanding of the site of influence of aspects of risk management for tax practitioners.

The research design is twofold. Phase one consisted of a wide-scale international survey with 1,061 tax experts across 59 jurisdictions. In phase two, the authors followed up with 68 semi-structured interviews with tax practitioners working in 11 different countries.

The findings recognise the importance of the firm as a significant “site of influence” for tax practitioners in shaping their risk appetite in their tax work. The firm eclipses other influences of risk such as professional body oversight, public interest and demographic markers such as gender and career stage. The authors show that firm is significant, irrespective of size of firm.

This work has practical implications as the findings highlight the importance of oversight of professional service firms by both the professional accountancy bodies and revenue authorities. The findings may have impact on the ethical training and guidance for trainee accountants in terms of an increased awareness on the employing firm as a site of influence for tax practitioners.

This research is important as it adds to the significant body of work on firm socialisation and highlights the important role that the firm holds in moderating (or exacerbating) the risk appetite of tax practitioners, which has significant implications in terms of pushing the boundaries of tax aggressive behaviours. The work aims to recognise the important role that tax practitioners can have in moderating aggressive tax practice, and, thus, reducing tax inequalities and shaping a better world of “Reduced Inequalities” (SDG10).

This study examines the effect of non-audit fees (NAF) provisions on interest payments classification shifting. In addition, we investigate to what extent the NAF economic bonding and interest payments classification shifting is contingent on internal governance and firm financial well-being.

This study employed probit regression using a sample of UK non-financial firms indexed in FT UK (500) over the period from 2009 to 2017.

We find evidence that the economic bonding of NAF between external auditors and their clients is more likely to encourage managers in UK firms to manipulate operating cash flows through interest payment classification shifting. In addition, and interestingly, our results evince that classification-shifting may be the less costly and soft choice of managers in firms with strong governance and charging higher NAF. Furthermore, we show that financially distressed firms associated with their auditors in purchasing non-audit services are more prone to attempting to manipulate and engage in interest payments classification-shifting. Our result did not provide a significant effect of external auditor tenure on the interest payments classification shifting.

Our findings are subject to the following limitations: First, this study uses a composite index to measure the quality of internal corporate governance. It focuses only on the board of directors, but this index does not reflect other internal governance mechanisms. Second, this study is subject to limited study time due to the implementation of key IFRS standards (IFRS 9 Financial Instruments and IFRS 15 Revenue from Contract with Customers) from 2018–2019.

This study was motivated by the UK’s Financial Reporting Council regulators' pressure on the Big 4 audit firms to move more audit time into main auditing activities, reduce cross-selling to audit clients and separate their audit practices by 2024. Overall, we provide new evidence that directs a close spotlight on the threats of NAF that are potentially useful to regulators, shareholders and investors.

It is motivated by the UK’s Financial Reporting Council regulators' pressure on the Big 4 to move more audit firm time into main auditing activities, reduce cross-selling to audit clients and separate their audit practices by 2024. Overall, we provide new evidence that directs a close spotlight on the threats of NAS that are potentially useful to regulators, shareholders and investors.

Prior research has emphasised the importance of the early phases of construction projects, as well as the difficulties of procuring engineering services – especially due to the uncertainties. Despite that, studies on the public procurement of engineering services are scarce. Although scholars have shown that uncertainty may affect the choice of control modes, the level of uncertainty that characterises services is not addressed by the two task characteristics: knowledge of the transformation process and output measurability. The purpose is to investigate organisational control in public procurement of engineering services.

The existing control model was adjusted in this study by conceptually adding uncertainty as a third aspect to the two task characteristics. A single case study of the Swedish Transport Administration was used. The empirical data, comprising 14 interviews with managers from the client and engineering consulting companies, were analysed using flexible pattern matching and visual mapping approaches and then illustrated using the model.

The public client did not base its choice of control modes on uncertainty, but rather on the other two task characteristics. Consequently, the service providers argued that the chosen control modes reduced their creativity, increased their financial risks and caused unclear responsibilities. This study therefore shows that uncertainty is an important factor to consider in the choice of control modes, both from a theoretical perspective and from the service providers' point of view. The developed model may therefore be useful for researchers as well as practitioners.

This study is the first attempt to add uncertainty as a task characteristic when choosing control modes. The results contribute to the scarce control literature regarding the procurement of engineering services for construction projects and the procurement of other services with high uncertainty.

This study aims to examine the effect of audit firm tenure (AFT) on corporate tax avoidance (CTA) and the moderating effect of the COVID-19 pandemic.

The sample comprises 41,074 firm-year observations from 32 countries from 2015 to 2020, for which data are collected from various sources: financial data from the Refinitiv database, country corporate tax rates from the Tax Foundation, and other country-level data from the World Bank database. The authors use the book tax difference to measure CTA and multiple proxies for AFT.

This study finds that a longer AFT is associated with higher CTA, confirming the notion that long AFT impairs auditor independence. The findings remain robust when considering various AFT proxies, incorporating Hofstede’s cultural factors, using weighted least-squares estimation and addressing endogeneity through propensity score matching. This study also finds a non-linear relationship between extended client and auditor relationships and CTA, supporting the mandatory audit firm rotation regulation and increasing investors’ caution regarding the consequences of extended client–auditor relationships on firm behaviour.

This study offers new evidence on the effect of the COVID-19 pandemic on the link between AFT and CTA and documents a non-linear relationship between AFT, which has not been addressed in prior studies.

The findings of this study have several significant practical implications. First, governments and policymakers gain insights into the consequences of extended auditor–client relationships, hence calling for a review of auditing and taxation regulations. Second, the findings provide important insights into the issue of auditor independence, especially during long engagements and crises such as COVID-19. Finally, investors and tax authorities should be more cautious about the risks of aggressive tax avoidance during crisis periods.

To the best of the authors’ knowledge, this is the first study to use a global data set to investigate the effect of AFT on CTA during the COVID-19 pandemic.

This study investigates the relationship between companies with military directors and audit fees in Indonesia.

Using upper echelon and audit pricing theories, the authors examine military directors' roles in the demand for and supply of auditing services. The authors use Indonesia as their research setting as their military forces have a long history of involvement in business. The study sample includes 898 firm-year observations on the Indonesia Stock Exchange during 2014–2018.

The authors find a negative relationship between military connections and audit fees. This is consistent with auditors assessing lower audit risk and charging lower audit fees to companies that have leaders with military experience. The study findings are strongest where there is military experience on the board of directors and where the military experience is from the Army.

This study extends the literature on the benefits of military experience in company leadership, especially in the context of auditing research. The study findings also have implications for the selection of board candidates and auditor risk assessments.

Amid public acknowledgment of recurring ethical violations in the volatile financial service industry, internal auditing (IA) professionals do not seem to have done enough to perform their professional responsibility as a line of defense for their employing organizations. This chapter explores whether changes in an IA approach can effectively enable IA as a practice to fulfill its governance role in managing “conduct risk,” i.e., any behavior in a firm that could cause problems to consumer protection, market integrity or competition. We examine the ethical implications of the existing compliance-based IA approach and explain its ineffectiveness in auditing conduct risk within a turbulent environment. Using action research, we explain the germane changes necessary to define a new conduct-focused IA approach capable of predicting and preventing ethical wrongdoing. A conduct-focused approach launches auditors into unfamiliar but strategically critical areas to not only identify material risks but also add value to their organizations. The authors further examine how a change in the auditor’s mindset and other factors promote the effectiveness of the new IA approach in a sustainable way. This chapter contributes to the literature by investigating how internal auditors can better fulfill their professional responsibility when adopting a conduct-focused approach.

Social procurement (SP) is a complicated and risky innovation, the adoption of which needs to be accompanied by complementary process and organizational change. To date, however, there has been little empirical evidence explaining whether and how different sorts of external pressures affect the level of SP adoption in the construction sector. Drawing on institutional theory, this study aims to analyze how three types of isomorphic pressures (i.e. coercive, mimetic and normative pressures) influence the adoption of SP in the construction sector.

The impacts of these pressures are empirically tested with survey data collected from 134 construction firms in the Chinese construction industry.

The findings show that both coercive and mimetic pressures have a considerable impact on the adoption of SP. However, there is little evidence in this study that normative demands had a major impact on SP.

This research is a useful instrument for promoting a favorable social attitude regarding construction procurement. Through socioeconomic regeneration and development, procurement can be considered as a significant route for social transformation, economic development and poverty reduction.

This study addresses the paucity of research into SP in the construction industry by establishing the institutional drivers to procuring services and products from a social enterprise perspective. Findings from this study extend the frontiers of existing knowledge on SP in the construction industry.

Peer support in the substance use arena has a long and interesting history. Many of the ideas for substance use treatment can be traced back to the fellowship of Alcoholics Anonymous and its mutual aid/self-help programme. However, as interest in providing care and support progressed, and research began to develop, other equally helpful methods of providing peer supports emerged. In this chapter, we discuss this emergence of peer support, and describe how and where this support is provided. The processes and relationships involved in peer support work and the operationalising of lived experience are outlined.