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The process performed during a financial statement audit is critical but is unobservable to external stakeholders. This can create challenges in assessing the quality of individual audit engagements. This study’s objective is to introduce and investigate an archival measure based on publicly available information that proxies for audit process ineffectiveness.

We proxy for audit process ineffectiveness using errors in the audit report. We examine audit reports to identify errors because the audit report represents the auditor’s primary communication with financial statement users and is subject to rigorous preparation and review. We first examine if typical factors influencing audit process ineffectiveness are associated with audit report errors. We then examine whether audit reports containing errors are associated with audit quality measures.

We find that errors are more likely to be present in audit reports when time pressure exists and less likely when auditors exert more effort and when audit engagement risk is higher. Results also show that errors in audit reports are positively associated with financial reporting misstatements, measured by subsequently disclosed Big R restatements and out-of-period adjustments.

Collectively, our evidence suggests that an audit report containing an error is a suitable proxy for audit process ineffectiveness. This proxy has audit quality implications because inattentiveness in one area of the audit process could indicate inattentiveness in another area.

The purpose of this study is to establish the relationship between chief executive officer (CEO) power, audit committee effectiveness and earnings quality in regulated firms in Uganda.

The authors employed cross-sectional and correlational research designs, based on a sample of 136 regulated firms in Uganda. Data were collected using a questionnaire survey from Chief Finance Officers and Chief Audit Executives. Data were analyzed using a Statistical Package for Social Sciences and Partial Least Squares Structural Equation Modeling.

Results indicate that CEO power causes negative variances in earnings quality. The results also reveal that audit committee effectiveness positively relates relatively similarly with earnings quality. In addition, CEO power and audit committee effectiveness are negative and significantly related. The results further indicate that CEO power and earnings quality are mediated by audit committee effectiveness.

CEO power creates an opaque accounting environment which may leave the stakeholders unable to evaluate the true economic reality of the firm. Audit committee effectiveness is an important enabler for reporting high-quality earnings even in the presence of a powerful CEO.

This study contributes toward a methodological stance of using perceptions to understand earnings quality in regulated firms in Uganda. This is probably the first study that has specifically explored earnings quality using only the fundamental qualitative characteristics of accounting information (as proxies) as enshrined in the Conceptual Framework for Financial Reporting 2018 particularly in Uganda since Her adoption of International Financial Reporting Standards in 1998. Second, the indirect effect of audit committee effectiveness and CEO power is tested.

The purpose of this study is to investigate the association between nonaudit services (NAS) and out-of-period adjustments (OOPAs). Over the years, the number of OOPAs has risen while the number of restatements has decreased. This could indicate an improvement in financial reporting quality. It could also indicate the use of a type of stealth restatement for opportunistic purposes. These less prominent restatements are more likely to go undetected and could perpetuate opportunistic disclosure and mitigate the likelihood of unfavorable market reactions.

The authors use a two-stage multivariate regression analysis to examine the relationship between NAS and the reporting of an OOPA. The authors use prior research on NAS to guide the model development. The authors perform several robustness checks including different types of NAS and different characteristics of OOPAs.

The results indicate that NAS has a significantly negative association with the existence of OOPAs. The core findings suggest that NAS does not impair auditor independence. Rather, greater amounts of NAS may contribute to knowledge spillover, which leads to higher financial reporting and audit quality. The results are robust to several additional tests.

The results raise interesting implications for regulators, executives, auditors, investors and future research. The authors provide insight into the relationship between NAS and auditor independence.

To the best of the authors’ knowledge, prior research has not considered the effect of NAS on OOPAs. The authors contribute to the literature by providing evidence that OOPAs, a form of stealth restatements, is an important consideration in audit quality research.

This study examines whether country-level financial integration affects firms' accounting choices and the quality of financial information.

This study employs Propensity Score Matching (PSM), and panel regressions of a large sample of data from 20 emerging markets over the period 1987–2018.

This study finds evidence that increased level of financial integration is significantly positively associated with firms' accruals earnings management (AEM) and real earnings management (REM).

Findings in the study have implications for standard-setting bodies that aim to enhance the usefulness of financial reporting quality. The study also has implications for various initiatives by governments in emerging markets aimed at raising investor confidence and fostering stock market development through greater financial integration.

Findings in the study have implications for standard-setting bodies that aim to enhance the usefulness and quality of financial reporting. The findings can be of interest to analysts, auditors and other monitoring institutions who play a crucial role in detecting earnings management and reducing information asymmetry. Finally, the study has implications for various initiatives by governments in emerging markets aimed at raising investor confidence and fostering stock market development through greater financial integration.

Findings in the study reveal how country-level financial integration affects accruals and real earnings management in a sample of firms from 20 emerging markets. Further, the study adds to the growing body of literature on emerging markets where capital markets mechanisms, regulatory environment and firm's corporate governance are distinct to developed markets.

The purpose of this study is to explore the economic impact of financial restatements by major customers on the audit opinion of their suppliers, showing that non-financial information disclosure potentially helps auditors make better assessments.

Using a sample of China’s listed firms from 2007 to 2021, the authors aim to find the relationship between customers’ financial restatements and their suppliers’ audit opinions. Heckman selection model, placebo tests and other robustness checks are used as well.

The findings reveal that customers’ financial restatements have a significant effect on the likelihood of suppliers receiving modified audit opinions. This relationship is pronounced when suppliers face a higher level of financial constraints, exhibit poorer accounting conservatism or receive more negative media coverage. Additionally, this effect occurs through increased business risk and information risk, which heightens auditors’ perceived audit risk. Moreover, the study highlights the influence of switching costs, auditor expertise and restatement severity on this relationship.

Risks originating from customers can spread along the supply chain, emphasizing the necessity for auditors to give heightened attention to both the audited firms and their customer information. Moreover, regulators should carefully consider the important impact of customer information disclosures to maximize the protection of the interests of external information users.

This study not only confirms the crucial role of customer information disclosures in annual reports for stakeholders and auditors but also contributes to the existing literature on customer–supplier relationships.

This study examines the impact of audit partner tenure on Key Audit Matters (KAM) disclosures within Gulf Cooperation Council (GCC) countries. It explores how Hofstede’s cultural dimensions influence this relationship, elucidating the effect of cultural context on auditing practices.

Utilizing a sample of 456 non-financial firms in the GCC from 2016 to 2021, the study employs regression analyses to explore audit partner tenure's influence on KAM disclosures and the moderating effects of Hofstede's dimensions of power distance, individualism, masculinity and uncertainty avoidance. This affords a detailed examination of individual and cultural impacts on audit quality.

Results reveal a positive relationship between audit partner tenure and KAM disclosures, suggesting that firm-specific knowledge and industry expertise acquired over a long tenure may enhance auditors' ability to identify and report significant matters. Power distance and uncertainty avoidance amplify this effect, whereas individualism diminishes it. Masculinity does not yield significant results.

This study underscores the need for auditing standards to reflect the complex interplay of auditor tenure and cultural dynamics in the profession's global landscape.

This research contributes to the literature on audit quality by highlighting the formative role of individual auditors and cultural characteristics in KAM disclosure practices. It is among the first to quantitatively analyse the intersection of audit partner tenure and culture in the GCC. It provides valuable insights for regulators, practitioners and policymakers seeking to enhance audit practices across diverse cultural environments.

Platform owners need to encourage yet control complementors in ways that generate benefits. Retaining too much control can restrict innovation and knowledge flows; giving up too much control can lead to poor quality and platform instability. Studies provide mixed findings that make it difficult to draw generalizable conclusions. We aim to provide a more accurate understanding of the link between platform control and platform benefits.

We conducted a meta-analysis of empirical research in this area.

Access-based control positively influences realization benefits, but it does not appear to affect creation benefits. Authority-based control does not appear to affect creation or realization benefits. Control is positively linked to benefits on transaction platforms but not on innovation platforms. Platform control is positively related to platform benefits in studies that use objective measures and in studies that measure control from the complementor’s perspective. However, the relationship between control and benefits is uncertain in studies that use perceptual measures and in studies that measure control from the owner’s perspective.

Tighter restrictions on who can join the platform can lead to greater use of platform innovations. Platform control is also an effective driver of benefits on transaction platforms. Researchers should carefully think through the manner in which they measure platform control and platform benefits. Our study is limited by a small sample size, four moderators and a set of empirical-only studies.

Our findings can guide future research and help practitioners better understand when platform control is related to platform benefits.

This paper aims to investigate materiality judgement providing insights, critiques and future research paths in light of the open debate on the role of materiality in corporate financial disclosure, highlighting potential connections and implications with sustainability and intellectual capital (IC) reporting.

The research presents an overview of the analysis of financial materiality, including new stimuli from recent studies and regulatory requirements for financial and non-financial reporting. Accordingly, this study used a systematic literature review (SLR) based on a combination of content, text and bibliometric analysis of materiality in accounting research studies, collecting data from the Scopus database as one of the most relevant repositories.

The SLR identified four relevant research trends, concerning: (1) the relevance of materiality principles in corporate disclosure; (2) financial reporting practices and materiality; (3) theories and approaches in defining financial materiality and (4) the existence of quantitative and qualitative thresholds in the materiality judgement.

The results provide theoretical and practical implications when comprehending the development of the concept of financial materiality in financial statements and whether they can be appropriate in reporting IC as well. We identified future research paths.

From a practical perspective, this study is useful for companies implementing financial materiality based on stakeholder engagement and improving their transparency in financial and non-financial reporting practices.

The research investigates if the process for assessing materiality is in line with the expectations of all stakeholders involved in financial and non-financial reporting.

This research is the first to investigate the scientific basis and applicability of the concept of financial materiality to sustainability and IC reporting.

The framework of this paper is financial mathematics and, more specifically, the control of data fraud and manipulation with their subsequent economic effects, namely, in financial markets. The purpose of this paper is to calculate the global loss or gain, which supposes, for the borrower, a change of the interest rate while the contracted loan is in force or, in another case, the loan has finished.

The methodology used in this work has been, in the first place, a review of the existing literature on the topic of manipulability and abusiveness of the loan interest rates applied by banks; in the second place, the introduction of a mathematical-financial analysis to calculate the interests paid in excess; and, finally, the compilation of several sentences issued on the application of the so-called mortgage loan reference index (MLRI) to mortgage loans in Spain.

There are three main contributions in this paper. First, the calculation of the interests paid in excess in the amortization of mortgage loans referenced to an overvalued interest rate. Second, an empirical application shows the amount to be refunded to a Spanish consumer when amortizing his/her mortgage loan referenced to the MLRI instead of the Euro InterBank Offered Rate (EURIBOR). Third, consideration has been made to the effects and the possible solutions to the legal problems arising from this type of contract.

This research is a useful tool capable of implementing the financial calculation needed to find out overpaid interests in mortgage loans and to execute the sentences dealing with this topic. However, a limitation of this study is the lack of enough sentences on mortgage loans referenced to the MLRI to get some additional information about the number of borrowers affected by these legal sentences and the amount refunded by the financial institutions.

To the best of the authors’ knowledge, this is the first time that deviations in the payment of interests have been calculated when amortizing a mortgage.

This study reviews and discusses the accounting literature that analyzes the role of auditors and enforcers in the context of fraud.

This literature review includes both qualitative and quantitative studies, based on the idea that the findings from different research paradigms can shed light on the complex interactions between different financial reporting controls. The authors use a mixed-methods research synthesis and select 64 accounting journal articles to analyze the main proxies for fraud, the stages of the fraud process under investigation and the roles played by auditors and enforcers.

The study highlights heterogeneity with respect to the terms and concepts used to capture the fraud phenomenon, a fragmentation in terms of the measures used in quantitative studies and a low level of detail in the fraud analysis. The review also shows a limited number of case studies and a lack of focus on the interaction and interplay between enforcers and auditors.

This study outlines directions for future accounting research on fraud.

The analysis underscores the need for the academic community, policymakers and practitioners to work together to prevent the destructive economic and social consequences of fraud in an increasingly complex and interconnected environment.

This study differs from previous literature reviews that focus on a single monitoring mechanism or deal with fraud in a broadly manner by discussing how the accounting literature addresses the roles and the complex interplay between enforcers and auditors in the context of accounting fraud.