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Abstract

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-0-76231-393-8

Article
Publication date: 1 September 2023

Awni Rawashdeh

The advent of technology has propelled audit firms to incorporate AI-based audit services, bringing the relationship between audit clients and firms into sharper focus…

Abstract

Purpose

The advent of technology has propelled audit firms to incorporate AI-based audit services, bringing the relationship between audit clients and firms into sharper focus. Nonetheless, the understanding of how AI-based audit services affect this relationship remains sparse. This study strives to probe how an audit client's satisfaction with AI-based audit services influences their trust in audit firms. Identifying the variables affecting this trust, the research aspires to gain a deeper comprehension of the implications of AI-based audit services on the auditor-client relationship, ultimately aiming to boost client satisfaction and cultivate trust.

Design/methodology/approach

A conceptual framework has been devised, grounded in the client-company relationship model, to delineate the relationship between perceived quality, perceived value, attitude and satisfaction with AI-based audit services and their subsequent impact on trust in audit firms. The research entailed an empirical investigation employing Facebook ads, gathering 288 valid responses for evaluation. The structural equation method, utilized in conjunction with SPSS and Amos statistical applications, verified the reliability and overarching structure of the scales employed to measure these elements. A hybrid multi-analytical technique of structural equation modeling and artificial neural networks (SEM-ANN) was deployed to empirically validate the collated data.

Findings

The research unveiled a significant and positive relationship between perceived value and client satisfaction, trust and attitude towards AI-based audit services, along with the link between perceived quality and client satisfaction. The findings suggest that a favorable attitude and perceived quality of AI-based audit services could enhance satisfaction, subsequently augmenting perceived value and client trust. By focusing on the delivery of superior-quality services that fulfill clients' value expectations, firms may amplify client satisfaction and trust.

Research limitations/implications

Further inquiries are required to appraise the influence of advanced technology adoption within audit firms on client trust-building mechanisms. Moreover, an understanding of why the impact of perceived quality on perceived value proves ineffectual in the context of audit client trust-building warrants further exploration. In interpreting the findings of this study, one should consider the inherent limitations of the empirical analysis, inclusive of the utilization of Facebook ads as a data-gathering tool.

Practical implications

The research yielded insightful theoretical and practical implications that can bolster audit clients' trust in audit firms amid technological advancements within the audit landscape. The results imply that audit firms should contemplate implementing trust-building mechanisms by creating value and influencing clients' stance towards AI-based audit services to establish trust, particularly when vying with competing firms. As technological evolutions impinge on trustworthiness, audit firms must prioritize clients' perceived value and satisfaction.

Originality/value

To the researcher's best knowledge, no previous study has scrutinized the impact of satisfaction with AI-based audit services on cultivating audit client trust in audit firms, in contrast to past research that has focused on the auditors' trust in the audit client. To bridge these gaps, this study employs a comprehensive and integrative theoretical model.

Details

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

Keywords

Article
Publication date: 30 September 2008

Kym Boon, Jill McKinnon and Philip Ross

The paper aims to analyse audit service quality attributes that were perceived to be important in compulsory audit tendering (CAT) in local councils in New South Wales (NSW). It…

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Abstract

Purpose

The paper aims to analyse audit service quality attributes that were perceived to be important in compulsory audit tendering (CAT) in local councils in New South Wales (NSW). It focuses principally on whether CAT leads to an impairment of auditor independence and audit quality.

Design/methodology/approach

A questionnaire survey was conducted of 235 NSW local council finance professionals and 35 local council internal auditors in May 2006.

Findings

The most important attributes in evaluating audit service quality were industry expertise, audit firm experience with a council, technical competence, independence, ethical standards and due care. The least important attributes were scepticism, freshness of perspective, audit firm size, and non‐audit services. There is considerable consistency in the findings with those in non‐CAT contexts.

Research limitations/implications

The paper is subject to the general limitations of the survey questionnaire method. A further limitation is that audit quality was assessed using perceptions of audit service quality by preparers of local council financial statements, rather than by users of those statements.

Practical implications

Audit firms will be better able to understand the audit service quality attributes valued by local council clients, to differentiate their promotional and service‐provision strategies, improve their audit quality, and better satisfy local council clients. Concerns that CAT may impair audit independence and audit quality do not appear to be founded.

Originality/value

Because the results are generally consistent with findings in non‐CAT contexts, there can be more confidence in CAT as a regulatory form of audit procurement.

Details

Accounting Research Journal, vol. 21 no. 2
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 3 May 2016

Naruanard Sarapaivanich and Paul G. Patterson

This study aims to examine the extent to which switching costs moderates the impact of trust, value and attractiveness of alternatives on client repatronage intentions.

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Abstract

Purpose

This study aims to examine the extent to which switching costs moderates the impact of trust, value and attractiveness of alternatives on client repatronage intentions.

Design/methodology/approach

The study combines qualitative and quantitative methodologies to create a cross-sectional survey covering four geographic regions in Thailand. Adopting a contingency perspective, the authors examine the moderating impact of two switching costs (economic and security) on the association among trust, value, attractiveness of alternatives and repatronage intentions.

Findings

A study of 519 small- and medium-sized enterprise (SME) clients of audit firms confirms the main effects of trust, value and alternative attractiveness on client retention; some but not all linkages are moderated by the costs of switching.

Researchlimitations/implications

This article focuses on one specific segment (SMEs) and one category of professional services. It would be worthwhile to extend the findings to larger firms and other professional services.

Originality/value

The study contributes to the understanding of relationship continuance among professional services clients by shifting the focus to when and in which contingency conditions trust, value and attractiveness of alternatives have greater or lesser impacts on repatronage intentions.

Details

Accounting Research Journal, vol. 29 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 30 September 2014

David N. Herda, Michael J. Petersen and Richard Fontaine

– The purpose of this paper is to determine if self-serving bias affects audit client satisfaction level with their audit firm.

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Abstract

Purpose

The purpose of this paper is to determine if self-serving bias affects audit client satisfaction level with their audit firm.

Design/methodology/approach

A 2×2 between-subjects design is used, where the authors experimentally manipulate the level of client involvement in the audit and the extent of value-added services the client received.

Findings

Using a sample of 115 financial managers (audit clients), the authors find no evidence that self-serving bias exists among clients in the experimental setting. Rather, they find that clients appear to be more satisfied with their auditor when they (clients) participate more in the service exchange.

Research limitations/implications

The research is limited to a specific context within the privately held company audit setting.

Practical implications

Audit firms may consider encouraging their privately held clients to participate more in the audit process by clearly communicating expectations and providing clients with audit preparedness materials, including templates and training where necessary.

Originality/value

Although the self-serving bias has been shown to exist in the marketing literature, the authors present a setting where the relationship between service provider (auditor) and customer (client) is such that the self-serving bias may not hold.

Details

Managerial Auditing Journal, vol. 29 no. 9
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 27 September 2018

Asmerom Atewebrhan Ghebremichael

This study uses conceptualizations and models of service quality and behavioural intentions from the service marketing and audit quality literature to investigate the influence of…

Abstract

Purpose

This study uses conceptualizations and models of service quality and behavioural intentions from the service marketing and audit quality literature to investigate the influence of supervisory board members’ perceptions about various dimensions of audit quality on their behavioural intentions. These dimensions pertain to auditor’s technical competence, functional (service) quality and auditor independence.

Design/methodology/approach

A survey of supervisory board members of large and medium companies in The Netherlands is made to identify audit quality dimensions. The multivariate analysis is used to identify the quality dimensions influencing supervisory board members’ behavioural intentions.

Findings

Overall, the author’s results indicate that the quality dimensions identified in this study have significant influence mainly in the supervisory board members’ intention to refer their auditors to an acquaintance. In this regard, the salient determinants are the functional quality dimensions and auditor independence. The technical quality dimensions are not found to be crucial. In contrast, most of the quality dimensions are not significant determinants of supervisory board members’ intention to retain or recommend the purchase of non-audit services from the auditor albeit having a minor influence. The results have some implications for regulators and audit firms.

Research limitations/implications

The author’s results are limited by the low response rate that did not allow us to conduct factor analysis on all the functional and technical variables at the same time.

Originality/value

This paper is the first to integrate service quality and behavioural intentions concepts from the marketing literature and auditing literature and apply it in a corporate governance setting.

Details

International Journal of Quality and Service Sciences, vol. 11 no. 1
Type: Research Article
ISSN: 1756-669X

Keywords

Article
Publication date: 25 August 2021

Athuman Kalokola Mahyoro and Pendo Shukrani Kasoga

The purpose of this study is to examine how the level of attributes of the internal audit function relates to the effectiveness of internal audit services in local government…

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Abstract

Purpose

The purpose of this study is to examine how the level of attributes of the internal audit function relates to the effectiveness of internal audit services in local government authorities (LGAs) in Tanzania.

Design/methodology/approach

Data have been collected through a survey whereby 510 respondents from LGAs in Tanzania through their Heads of Internal Audit Functions, Internal Auditors and Chairpersons of Audit Committees respond to the questionnaire. The data were subjected to principal component analysis and exploratory factor analysis to reduce the set of items and to provide continuous scores for use in multiple regression analyses.

Findings

The findings reveal that audit quality; organization setting and auditee attributes have a significant positive influence on the effectiveness of internal audit services in LGAs in Tanzania.

Research limitations/implications

The study covered only LGAs in Tanzania. Future research in this field should address the gaps identified in the study.

Practical implications

This paper highlights areas that need management attention on the improvement of the effectiveness of internal audit units.

Originality/value

This paper contributes to the literature of both internal auditing and management studies by linking the level of attributes of internal audit function which are audit quality, organization setting, auditee attributes and effectiveness of internal audit services in Tanzania.

Details

Managerial Auditing Journal, vol. 36 no. 7
Type: Research Article
ISSN: 0268-6902

Keywords

Open Access
Article
Publication date: 29 February 2016

Md Jahidur Rahman, Mo Lai Lan Phllis and Lam Mo

The purpose of this paper is to study the impact of the prohibition of certain non-audit services by the Securities and Exchange Commission (SEC) of Bangladesh on the…

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Abstract

The purpose of this paper is to study the impact of the prohibition of certain non-audit services by the Securities and Exchange Commission (SEC) of Bangladesh on the profitability of the audit firms which are affiliated with Big-4 international audit firms. This paper is based on personal in-depth interviews with the Big-4-affiliated audit firms. A qualitative approach, in a way which is descriptive and illustrative, is adopted in this research. This research provides evidence for the fact that audit services are the most significant and stable source of income for an audit firm. Although respondents generally admit that non-audit services might be more profitable, they all agree that audit services are indeed the core operations of an audit firm. Findings in this paper reveal a contemporary picture of the auditing profession in Bangladesh and elucidate the impact that the implementation of Corporate Governance Order 2006 has on an audit firm's profitability. This research is the first in-depth study of the impact of the prohibition of non-audit services on the profitability of the Big-4-affiliated audit firms in Bangladesh. Financial reporting regulatory authorities in Bangladesh or other developing countries may find the findings in this paper useful.

Details

Asian Journal of Accounting Research, vol. 1 no. 1
Type: Research Article
ISSN: 2459-9700

Article
Publication date: 15 April 2019

Jomjai Sampet, Naruanard Sarapaivanich and Paul Patterson

With increased competition under the establishment of the ASEAN Economic Community (AEC) in December 2015, CPA and Tax Auditors are free to export their services within AEC…

Abstract

Purpose

With increased competition under the establishment of the ASEAN Economic Community (AEC) in December 2015, CPA and Tax Auditors are free to export their services within AEC partner countries. Hence, it is crucial that the growing numbers of auditors in the region differentiate themselves by providing superior perceived audit quality and client value in order to retain (and attract) clients. Based on theoretical foundations of service-dominant logic and culture theory, the purpose of this paper is to investigate the role of client involvement in the audit process and client psychological comfort in influencing client perceptions of audit quality.

Design/methodology/approach

A survey was used to collect data from firms listed on the Thai Stock Exchange. The unit of analysis was the client firm. A key informant method was used whereby a senior manager, heavily involved in the auditor assessment and selection process answered all questions on behalf of their company. Data from 190 firms are subsequently analyzed with structural equation modeling.

Findings

Both client level of involvement and psychological comfort impact their perceptions of three dimensions of audit quality: service quality, independence and competence. Audit quality in turn is strongly associated with overall client satisfaction.

Originality/value

While various scholarly works have examined audit quality, this study does so in an emerging, highly collectivist culture (Thailand) where due to cultural norms, relationships take on added importance. More importantly, for the first time, the study shines the spotlight on the role that client involvement in the audit process, and client psychological comfort, play in influencing client perceptions of audit quality.

Details

Asian Review of Accounting, vol. 27 no. 2
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 10 March 2022

Kam-Wah Lai

Regulators treat all non-audit services the same by using a broad-brush approach which is reflected in the study of total non-audit fees in the same analyses or different non-audit

Abstract

Purpose

Regulators treat all non-audit services the same by using a broad-brush approach which is reflected in the study of total non-audit fees in the same analyses or different non-audit fees in isolation by prior studies. To know whether the non-audit services have different effects and hence, should be regulated separately, this paper compares their effects on audit report lag and examines whether they follow the implied hierarchy of the Securities and Exchange Commission.

Design/methodology/approach

The effects of audit-related non-audit fees, tax fees and other non-audit fees are compared in an audit report lag model to determine whether they are the same statistically. Supporting tests for audit quality use discretionary accruals and the reporting of a small profit or small positive change in profit.

Findings

This paper finds that different non-audit fees do not have the same effects on report lag and partial support for the implied hierarchy of the Commission. Specifically, for large accelerated filers, audit-related fees and tax fees have the same negative effects on report lag but other non-audit fees are unrelated to report lag. Tests of audit quality suggest that auditors do not compromise audit quality.

Research limitations/implications

Different non-audit services are unique in their spillover effects and deserve individual attention. Audit practitioners could be more comfortable in providing audit-related non-audit or tax services for audit clients since these services could facilitate audit work without compromising independence. On the other hand, they should be cautious about the provision of other non-audit services because the services do not enhance the efficiency of audit work and without such a benefit to audit clients, the provision may create issues of perceived independence.

Practical implications

Insight is limited by the types of disclosure of non-audit fees available and the lack of internal measures of audit efficiency.

Originality/value

The results provide deeper insight into the knowledge spillover theory and prior studies which implicitly assume all non-audit services having the same effect. The results suggest that the services should be regulated each on its own but not in a bundle. Last, this paper provides the first evidence that audit-related non-audit fees reduce report lag.

Details

Journal of Applied Accounting Research, vol. 24 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

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