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The purpose of this paper is to investigate the perceptions of a sample of Jordanian external auditors for the importance given by them to a number of factors which may influence their reliance on an internal auditor during their external audit. The paper also examines the relationship, if any, between the degree of reliance on the internal and external audit fees.

A sample of 100 external auditors is employed to investigate the perceptions of external auditors as to the importance given by them to a number of factors which may influence their reliance on an internal auditor during their external audit. Also, a cross‐sectional multiple regression analysis is conducted to examine the impact of this reliance on audit fees.

The results of the paper indicate that external auditors in Jordan consider the objectivity, competence and work performance of internal auditors as very important factors affecting their reliance decisions. It is found that “objectivity” had the highest mean score (4.353), followed by “competence” (4.188) and “work performance” (4.156). The results of the multiple regression analysis indicated that the size of the audited company is the most important variable in explaining the variation in audit fees paid by the sample companies. As for the reliance variable, it is found insignificant.

It is believed that no previous research has examined these issues on the basis of Jordanian data. Thus, the current paper aims to extend the literature on these topics on a developing country with different characteristics. The results of this paper will be of concern to companies in their attempt to reduce external audit fees. Audit firms may also benefit from the paper in terms of reducing the efforts of external auditors due to the understanding and cooperation between external and internal auditors.

The purpose of this study was to investigate the level of technology readiness (TR) of the Muslim and non-Muslim external auditors and its effect on their data analytics competencies (DACs). Literature is insufficient in addressing the comparative analysis of these constructs among these auditing professionals.

A survey was conducted on 201 external auditors. Questionnaire was developed based on TR and DAC literature. Pilot testing was conducted on 50 respondents, who were drawn from the sample.

Non-Muslim external auditors were found to be more technology ready than Muslim external auditors. The optimum dimension of TR was significantly different between Muslim and non-Muslim external auditors. Significant mean difference was found only for personal capabilities dimension of DAC between Muslim and non-Muslim external auditors. TR had a significant effect on Muslim external auditors’ personal capabilities dimension of DAC; however, there was insignificant effect on all DAC dimensions for non-Muslim external auditors. The highest DAC score of the external auditors were only at the beginner level for technical skills and technologies and tools expertise dimensions.

Using students as proxies for external auditors could lead to concerns with generalisability. Nonetheless, these students were competent to act as proxies as they had completed a six-month internship at an accounting firm.

The findings manifested the need for Muslim external auditors to be more technology ready. External auditors need to enhance their DAC to meet digital economic needs.

This study advocated the importance for auditing professionals to acknowledge the new data analytics challenges.

This research aims to explore whether recent audit reforms have improved auditor objectivity when performing non-audit services.

In two separate experiments, the authors tested whether external and internal auditors' inventory obsolescence judgments are influenced by their client's (or company's) role as the buyer or seller in an acquisition setting.

External auditors assessed the likelihood of inventory obsolescence objectively, regardless of their consulting role in the acquisition setting. Internal auditors assessed the likelihood of inventory obsolescence as higher when consulting for the buyer than when consulting for the seller, consistent with the supposition that the buyer would prefer to write-down inventory and negotiate a lower purchase price, whereas the seller would prefer the inventory not be written down.

From a regulatory perspective, external auditors may be relying too much on the work of internal auditors if internal auditors' lack of objectivity as consultants extends to their assurance role.

This paper extends prior research in the area of internal and external auditor objectivity and is the first paper to include both subject groups in the same experiment. It also addresses the current policy issues that may have a significant effect on audit quality and auditor liability.

Using 5,055 sample firm-years in Korea between 2009 and 2013, this paper aims to examine the association between the characteristics of the internal audit and the number of external audit hours as a proxy for audit efficiency.

This study is motivated by the International Standard on Auditing No. 610: “Using the work of internal auditors”. This auditing standard guides external auditors in using the work of internal auditors to obtain audit evidence and consult internal auditors for direct assistance. The authors expect that external audit efficiency will increase when the work of competent internal auditors is used.

The authors find that the number of internal auditors relative to the number of employees is associated with the number of external audit hours. This result suggests that the greater the availability of internal auditors, the greater their contribution will be to the financial statement audit and the more efficient the audit. The authors find evidence that external auditors use the work of internal auditors with accounting and legal expertise to improve audit efficiency. They also find some evidence that the work of internal auditors with greater availability is more effective during initial external audit engagements.

This study adds to the extant literature on the contributions of internal auditors to external audits by using archival data and by measuring audit effort using a large database of audit hours. In addition, our findings have practical implications for firms and external auditors who are evaluating the role and value of using the work of internal auditors. The authors also believe that the findings will be of interest to regulators or auditing standards boards.

Questions exist regarding the extent to which internal auditors should participate in the external audit, and wide variations are observed in practice. Many professional bodies increasingly advocate the view that increased coordination between the internal and external auditors, including increased use of the internal auditor for the external audit, provides more efficient and effective audit coverage. However, others maintain that internal auditors should not focus on areas that are the subject of external audit interest. This article attempts to shed light on this debate by using insights from transaction cost economics (TCE) to identify conditions under which organizations encourage internal audit participation in the external audit. An analysis of survey data collected from directors of Canadian internal audit departments indicate that some (TCE) variables, particularly transaction‐specific investment, are significantly associated with internal audit participation in the external audit.

Statement on Auditing Standards (SAS) 65 was issued in April 1991 to clarify various aspects of the working relationship that should exist between external and internal auditors. Describes the historical development of this relationship as viewed through the promulgation of authoritative literature, reports of official committees and commissions, and prior research. Presents a survey which describes various aspects and characteristics of this relationship in the light of the provisions of SAS 65.

The purpose of this paper is to advance knowledge and obtain an understanding of the phenomenon of public sector external auditing (PSEA) in Tanzania.

The paper used a grounded theory method informed by a critical approach. It used data from multiple sources including interviews, observations and documents, to provide a theoretical and practical understanding of PSEA in Tanzania. The theoretical aspects were developed ‘in vivo’ and were also informed by the Habermasian concept of colonisation.

The principal research findings from the data concern the central phenomenon of managing colonising tendencies in PSEA which appeared to be the core strategy for both the government and external auditors. While the government appeared to manage the National Audit Office of Tanzania (NAOT) appearance and exploited the legitimising features of PSEA, external auditors manoeuvred within colonising tendencies and attempted to maintain the ‘audit supremacy’ image. PSEA in Tanzania encountered colonising tendencies because of weak working relationship between the NAOT and other accountability agencies, inconsistencies in governance and politics, the culture of corruption and secrecy, dependence on foreign financing and mimicking of foreign models. To coexist within this colonising environment, external auditors managed their relationship with auditees and the complexities of PSEA roles. Managing colonising tendencies resulted into obscured subordination of PSEA, contributing to cosmetic accountability and growing public interest in PSEA.

It is hoped that future research in other countries, in and beyond Africa, will be undertaken to broaden and deepen our understanding of the external auditing of public sector entities.

The paper combines grounded theory with a critical approach to understand PSEA in a developing country.

The purpose of this paper is to provide evidence concerning the existence of earnings management (EM) from the perspective of external and internal auditors in Jordan.

A specially designed questionnaire was distributed to a sample of both external and internal auditors. To analyze the data of the study, t‐tests and ANOVA were used.

The results of the study showed that external auditors believe that management engages significantly only in legitimate EM that either increases or decreases income. However, internal auditors believe that management engages in legitimate practices that only increase income. In both cases, there were significant differences between their views. There is no significant difference between large and small companies regarding EM practices. However, the characteristics of internal governance structure have a significant effect on illegitimate EM, whereas no significant effect was found on legitimate EM.

The paper provides many recommendations, including the need to strengthen and reinforce the internal governance structure of companies and train external and internal auditors regarding EM techniques and measures of detection.

The originality of the study is that it provides evidence about EM practices from the perspective of both external and internal auditor in a developing country.

This paper uses questionnaires from and interviews to examine the level of co‐operation and co‐ordination between directors of internal audit departments, and partners and managers in external audit firms in Saudi Arabian companies. The results revealed that external auditors expressed concern about the independence, scope of work and small size of many internal audit departments. Internal auditors considered co‐operation between internal and external audits to be limited, although external auditors were more positive about the extent of co‐operation when the internal audit department was of high quality. The extent of reliance by the external auditor on the work of the internal auditor varied with the quality of the internal audit department. External auditors suggested that the objectivity, competence and work experience were important factors affecting the reliance decision. They felt that the internal audit function in many Saudi companies lacked professionalism and independence from management, which adversely affected its work and the potential for reliance thereon.

The purpose of this paper is to explore: the actual usage of generalized audit software (GAS) features among Egyptian external auditors, through the technology acceptance model (TAM); how the conceptual complexity of GAS features impact its actual usage; and what factors influencing the GAS use by Egyptian external auditors.

External audit professionals at 12 international audit firms, including the Big 4 and eight medium-sized firms, in Egypt were surveyed.

The results show that the basic features including database queries, ratio analysis, and audit sampling were higher in GAS use, perceived usefulness, and perceived ease of use among Egyptian external auditors than the advanced features: digital analysis, regression/ANOVA, and data mining classification. The structural equation modelling analysis by GAS features suggests that perceived ease of use has a stronger effect on GAS use when the conceptual complexity of GAS features is high. The analysis also support that the use of GAS by Egyptian external auditors is more affected by co-worker, supervisor, or organization through perceived usefulness, but not by job relevance, output quality, and result demonstration.

Although Egyptian external auditors participated in this study may limit the extent to which the findings may be generalized, the responses provide an insight into the actual usage of GAS features by external auditors and the impact of conceptual complexity of GAS features, which is consistent with the literature concerning the relatively low level of utilizing the advanced features of GAS by internal auditors, suggesting that the issues revealed should be of concern.

The results reported in this paper are useful to audit software developers and audit firms in their understanding of factors influencing GAS usage in a different audit context.

The study adds value to prior research by providing context-contingent insight into the application of TAM in an unexplored audit context.