Managerial Auditing Journal最新文献

{"title":"The coherence of the auditor-client relationship quality and auditor tenure with client’s perceptions on added-value in SME audits: a sociological perspective","authors":"Niels van Nieuw Amerongen, E. Coskun, Joost van Buuren, H. Duits","doi":"10.1108/maj-02-2021-3039","DOIUrl":"https://doi.org/10.1108/maj-02-2021-3039","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is gaining more insight into the impact of the strength of the auditor–client relationship on the client’s perceptions about added-value of the auditor service including the role of auditor tenure.\u0000\u0000\u0000Design/methodology/approach\u0000This study is based on both archival data (auditor tenure) and interview data (strength of the auditor–client relationship and client’s perceptions on added-value). The data comprise 497 small- and medium-sized entity (SME) audit engagements in The Netherlands.\u0000\u0000\u0000Findings\u0000This study finds evidence of a positive relationship between the strength of the auditor–client relationship and client’s perceptions on added-value. The data do not suggest a main effect of auditor tenure on client’s perceptions on added-value. This study finds evidence that auditor tenure, combined with the strength of the auditor–client relationship, has a strong positive influence on the perceived added-value. Therefore, this study argues that a longer tenure turns out to positively influence the auditor’s client-specific knowledge. The findings are relevant to auditing research by extending the scope of application of social exchange theory (SET) to SME settings, and by suggesting that the auditor–client relationship may capture more an audit quality dimension than auditor tenure. Findings are also relevant for audit practitioners in showing the contribution of a strong auditor–client relationship to client satisfaction in terms of perceived added-value. Standard setters may consider the results of this study in proper designing a specific auditing standard for smaller, less complex entities.\u0000\u0000\u0000Originality/value\u0000This study fits into a development in auditing research where auditing is viewed as a service. Prior studies in this area were mainly build on marketing concepts (e.g. Grönroos 2007). This study uses a sociological lens, particularly building on SET. In particular, this study focuses on the impact of relationship quality on perceived added value. Using this perspective sheds light on the importance of interactions between auditors and their clients. Both the product (audit opinion) and the process of collecting sufficient appropriate audit evidence in interaction with the client are important. This relationship perspective may serve as an explanation to why long auditor tenure can turn out to improve audit quality. Future research may build on this sociological perspective and particularly examine what conditions need to be present to realize benefits of the relationship approach and when a more transactional approach is more suitable.\u0000","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":" ","pages":""},"PeriodicalIF":2.9,"publicationDate":"2022-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42995243","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Relevance of supplementary fair value disclosures under market uncertainty: effects on audit fees and investors’ pricing","authors":"Laura Mehnaz, A. Rahman, H. Kabir","doi":"10.1108/maj-07-2021-3263","DOIUrl":"https://doi.org/10.1108/maj-07-2021-3263","url":null,"abstract":"Purpose Concerns relating to the representational faithfulness and, consequently, the relevance of fair value (FV) estimates are likely to be heightened in the wake of market uncertainty caused by the COVID pandemic. Therefore, this paper aims to study the relevance of supplementary disclosures intended to improve the representational faithfulness of FV estimates by examining their impacts on audit fees and investors’ valuation of FV adjustments in the uncertain market condition of 2020. Design/methodology/approach The sample is comprising Australian real estate firms. The authors develop both weighted and unweighted disclosure indices based on supplementary disclosures related to Level 3 FVs under IFRS 13 Fair Value Measurement. The authors measure the levels of disclosure by the sample firms based on these indices from 2018 to 2020 and ascertain their effects on audit fees and the market value of FV adjustments on investment properties. Findings The authors find that real estate firms increased supplementary FV disclosures during 2020. The authors document a negative association between supplementary disclosures and audit fees, although the authors find no incremental impact of disclosures on audit fees during the pandemic. Additionally, the authors find that investors’ pricing of FV adjustments increased with the increase in disclosures during the market uncertainty of 2020, while in the pre-uncertainty period, their pricing influence was not significant. Originality/value The findings extend the understanding of the role of supplementary disclosures on Level 3 investment properties in mitigating the perceived audit risk for auditors and the faithful representation concerns for investors in a distressed market environment.","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":" ","pages":""},"PeriodicalIF":2.9,"publicationDate":"2022-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47160392","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Insights into neo-institutional theory in accounting and auditing regulation research","authors":"E. Haapamäki","doi":"10.1108/maj-10-2020-2864","DOIUrl":"https://doi.org/10.1108/maj-10-2020-2864","url":null,"abstract":"\u0000Purpose\u0000Neo-institutional theory (NIT) has strengthened its position as one of the theories and frameworks used to investigate accounting as organizational, legislative, social and policymaking phenomena. This study aims to review how aspects of NIT are used and understood by accounting researchers. As a growing body of accounting and auditing articles in recent years has used NIT as a theoretical framework, this paper reviews and analyzes articles using NIT.\u0000\u0000\u0000Design/methodology/approach\u0000This study develops a comprehensive synthesis of current academic knowledge about NIT in accounting and auditing regulation literature. Further, it reveals areas requiring further examination.\u0000\u0000\u0000Findings\u0000The findings of this study indicate that prior studies have found evidence that accounting and auditing regulation is associated with all forms of isomorphism (coercive, mimetic and normative). For instance, institutional pressures influence the accounting and auditing standards adoption in different environments. Therefore, the synthesis of the literature suggests that coercive, mimetic and normative pressures have played a significant role in the harmonization of accounting and auditing practices worldwide. To conclude, NIT has become one of the relevant alternative approaches used to explore accounting and auditing regulation as a complex phenomenon.\u0000\u0000\u0000Research limitations/implications\u0000Accounting has often been referred to as a “narrow” and “technical” topic. In a way, NIT broadens the research field by extending, for instance, the approach of which external and internal pressures are associated with accounting standards adoption and why different accounting practices are adopted.\u0000\u0000\u0000Originality/value\u0000This study informs accounting scholars as to how NIT has been applied, and can be applied, in the accounting and auditing regulation literature. This benefits accounting researchers if they are considering whether to use NIT in their research. This study evaluates the contribution of NIT within this research field. It can be suggested that accounting researchers need to become more aware of the debates within the NIT literature, particularly as the theory is seen as conceptually ambiguous. To conclude, the synthesis highlights that NIT has offered a range of important contributions and has drawn attention to the link between accounting and auditing regulation research and the institutional environment.\u0000","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":" ","pages":""},"PeriodicalIF":2.9,"publicationDate":"2022-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41891162","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Effects of qualitative factors and auditors’ personal characteristics on materiality judgments","authors":"Mohamed Hegazy, Samar Salama","doi":"10.1108/maj-08-2019-2379","DOIUrl":"https://doi.org/10.1108/maj-08-2019-2379","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to investigate the effect of qualitative materiality factors on auditors’ assessment of materiality and the determination of the type of the auditors’ reports. This paper also analyzes whether differences in personal characteristics of auditors can influence their use of qualitative materiality factors in assessing material misstatements.\u0000\u0000\u0000Design/methodology/approach\u0000A questionnaire and experimental case studies were undertaken to determine whether differences in personal characteristics of auditors can influence their degree of reliance on qualitative factors in assessing the materiality of detected misstatements. Descriptive and statistical tests were used to analyze the data collected.\u0000\u0000\u0000Findings\u0000The results of this paper show that qualitative materiality factors strongly influence the auditor’s materiality judgments. However, no significant differences were found regarding the effects of auditors’ personal characteristics on the degree to which they rely on the qualitative factors in their materiality judgments. Also, in certain situations, auditors considered factors other than the income for assessing certain misstatements as material and consequently modified their audit reports.\u0000\u0000\u0000Originality/value\u0000This paper examines the influence of qualitative factors on auditors’ materiality judgments and develops a list of qualitative factors to be considered by auditors when assessing materiality. It also concludes that the nature of misstatement is the least important qualitative factor considered by auditors when assessing materiality of detected misstatements and that the existence of more explicit or standardized qualitative materiality guidelines would lead to a more uniform judgment among auditors.\u0000","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":" ","pages":""},"PeriodicalIF":2.9,"publicationDate":"2022-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42351311","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Key audit risks and audit procedures during the initial year of the COVID-19 pandemic: an analysis of audit reports 2019-2020","authors":"Michael Kend,Lan Anh Nguyen","doi":"10.1108/maj-07-2021-3225","DOIUrl":"https://doi.org/10.1108/maj-07-2021-3225","url":null,"abstract":"PurposeThe purpose of this study is to explore audit procedure disclosures related to key audit risks, during the prior year and the initial year of the COVID-19 outbreak, by reporting on matters published in over 3,000 Australian statutory audit reports during 2019 and 2020.Design/methodology/approachThis study partially uses latent semantic analysis methods to apply textual and readability analyses to external audit reports in Australia. The authors measure the tone of the audit reports using the Loughran and McDonald (2011) approach.FindingsThe authors find that 3% of audit procedures undertaken during 2020 were designed to address audit risks associated with the COVID-19 pandemic. As a percentage of total audit procedures undertaken during 2020, the authors find that smaller practitioners reported much less audit procedures related to COVID-19 audit risks than most larger audit firms. Finally, the textual analysis further found differences in the sentiment or tone of words used by different auditors in 2020, but differences in sentiment or tone were not found when 2020 was compared to the prior year 2019.Originality/valueThis study provides early evidence on whether auditors designed audit procedures to deal specifically with audit risks that arose due to the COVID-19 pandemic and on the extent and nature of those audit procedures. The study will help policymakers to better understand whether Key Audit Matters provided informational value to investors during a time of global crisis.","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":"14 1","pages":""},"PeriodicalIF":2.9,"publicationDate":"2022-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138515759","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Earnings management and investor protection during the COVID-19 pandemic: evidence from G-12 countries","authors":"Heba Ali,Hala M.G. Amin,Diana Mostafa,Ehab K.A. Mohamed","doi":"10.1108/maj-07-2021-3232","DOIUrl":"https://doi.org/10.1108/maj-07-2021-3232","url":null,"abstract":"PurposeThe purpose of this paper is to examine the inter-relations among the strength of investor protection institutions, earnings management (EM) and the COVID-19 pandemic.Design/methodology/approachAs a proxy for EM, the authors use discretionary accruals measure, estimated using the modified Jones model (1991). As a proxy for the strength of investor protection institutions, the study uses the Investor Protection Index, extracted from the Global Competitiveness Reports. The sample consists of 5,519 firms listed in the Group of Twelve countries during 2015–2020.FindingsThe study shows that firms tend to engage less in EM during the pandemic period. The authors also find a significantly negative relation between the strength of investor protection institutions and EM practices, and interestingly, this negative relation was found to be more pronounced during the pandemic period.Research limitations/implicationsFor investors and practitioners, the findings help get insights into the behavior of firms in response of the pandemic shock in countries with solid institutional and legal protection. For policymakers, the findings reaffirm the critical role that institutional incentives and reforms can play, in influencing firms to exert more efforts to promote their financial reporting quality.Originality/valueTo the best of our knowledge, the study is one of the first attempts to examine the link between EM practices and investor protection during the COVID-19 pandemic. The findings extend both the literature on the role of institutional factors in promoting the earnings quality and the literature on COVID-19’s effect on firm performance and practices.","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":"24 1","pages":""},"PeriodicalIF":2.9,"publicationDate":"2022-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138515796","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The effect of audit firm attributes on audit delay in the presence of financial reporting complexity","authors":"Chu Chen, Hongmei Jia, Yang Xu, D. Ziebart","doi":"10.1108/maj-12-2020-2969","DOIUrl":"https://doi.org/10.1108/maj-12-2020-2969","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the effects of audit firm attributes on audit delay associated with financial reporting complexity (FRC).\u0000\u0000\u0000Design/methodology/approach\u0000The authors use regression models with a sample of public firms with distinct monetary eXtensible Business Reporting Language tags to test the research hypotheses.\u0000\u0000\u0000Findings\u0000The authors find that two audit firm attributes (audit firm tenure and non-audit services performance) moderate the effect of FRC on audit delay.\u0000\u0000\u0000Practical implications\u0000The study provides insights to regulators, practitioners and investors into how firms may reduce audit delay from FRC by keeping their long-tenured auditors and allowing their auditors to gain more knowledge about the firms by providing non-audit services. The results, therefore, have implications for mandatory audit firm rotation.\u0000\u0000\u0000Originality/value\u0000To the best of the knowledge, this study conducts the first comprehensive analysis of this topic, exploring the impact of three audit firm attributes on audit delay caused by FRC. It attempts to illustrate the impact of external audit firms on reducing the adverse consequences of FRC.\u0000","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":" ","pages":""},"PeriodicalIF":2.9,"publicationDate":"2022-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46404446","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Auditor switching, lowballing and conditional conservatism: evidence from selected Asian countries","authors":"K. A. Kamarudin, A. Islam, Ahsan Habib, Wan Adibah Wan Ismail","doi":"10.1108/maj-01-2020-2530","DOIUrl":"https://doi.org/10.1108/maj-01-2020-2530","url":null,"abstract":"\u0000Purpose\u0000This paper aims to investigate the effect of auditor switching and lowballing on conditional conservatism, particularly how different types of auditor switching, namely, upward, downward and lateral switching to/from Big 4 and industry specialists, affect earnings quality in the following selected Asian countries: Indonesia, Malaysia, the Philippines, South Korea and Thailand.\u0000\u0000\u0000Design/methodology/approach\u0000Using conditional conservatism as a proxy for earnings quality, this study hypothesises that upward switching from non-Big 4 to Big 4 auditors, or from non-specialist to specialist auditors, would result in high conditional conservatism, while downward switching would lead to low conditional conservatism. The study further tests whether lowballing provides a viable explanation for reduced earnings conservatism in firms that switch from Big 4 to non-Big 4 auditors, or from specialist to non-specialist auditors.\u0000\u0000\u0000Findings\u0000The analysis, on a sample of 28,073 firm-year observations from 2007 to 2016, shows that the decision to downgrade auditors leads to lower conditional conservatism in the year of switching, compared with other firms and the pre-switching year. The evidence further shows that, when firms downgrade their auditors, lowballing contributes to a decrease in conditional conservatism in the first year of audit switching. Further, this research finds that switching to specialist auditors will result in increased conditional conservatism, while switching from specialist auditors to non-specialist auditors will result in reduced conditional conservatism.\u0000\u0000\u0000Practical implications\u0000The findings of this study are useful to investors who are looking to diversify their investment portfolio in developing markets, as evidence about auditor switching and quality of financial reporting may be an important factor in their investment decisions. Downward auditor switches and lowballing could act as red flags to investors in the sense that these events could signal a decrease in conditional conservatism and, hence, quality of earnings.\u0000\u0000\u0000Originality/value\u0000This research offers new evidence to support the view that management decisions to switch to lower-quality auditors will force newly appointed auditors to acquiesce to clients’ demands for reporting low-quality earnings.\u0000","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":" ","pages":""},"PeriodicalIF":2.9,"publicationDate":"2022-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42183329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Political connections, political uncertainty and audit fees: evidence from Pakistan","authors":"Fawad Ahmad, M. Bradbury, Ahsan Habib","doi":"10.1108/maj-06-2020-2715","DOIUrl":"https://doi.org/10.1108/maj-06-2020-2715","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the association between political connections, political uncertainty and audit fees. The authors use various measures of political connections and uncertainty: political connections (civil and military), political events (elections) and a general measure of political stability (i.e. a world bank index).\u0000\u0000\u0000Design/methodology/approach\u0000The authors measure the association between political connections, political uncertainty and audit fees. Audit fees reflect auditors’ perceptions of risk. The authors examine auditors’ business risk, clients’ audit and business risk after controlling for the variables used in prior audit fee research.\u0000\u0000\u0000Findings\u0000Results indicate that civil-connected firms pay significantly higher audit fees than non-connected firms owing to the instability of civil-political connections. Military-connected firms pay significantly lower audit fees than non-connected firms owing to the stable form of government. Furthermore, considering high leverage as a measure of clients’ high audit risk and high return-on-assets (ROA) as a measure of clients’ lower business risk, the authors interact leverage and ROA with civil and military connections. The results reveal that these risks moderate the relationship between political connection and audit fees. Election risk is independent of risk associated with political connections. General political stability reinforces the theme that a stable government results in lower risks.\u0000\u0000\u0000Originality/value\u0000The authors combine cross-sectional measures of political uncertainty (civil or military connections) with time-dependent measures (general measures of political instability and elections).\u0000","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":" ","pages":""},"PeriodicalIF":2.9,"publicationDate":"2021-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42518871","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Factors associated with the adoption of data analytics by internal audit function","authors":"S. Islam, Thomas F. Stafford","doi":"10.1108/maj-04-2021-3090","DOIUrl":"https://doi.org/10.1108/maj-04-2021-3090","url":null,"abstract":"\u0000Purpose\u0000The benefits of data analytics in the internal audit function (IAF) are clear; less is known about IAF adoption of analytics. The purpose of this study is to examine the factors driving IAF adoption of analytics.\u0000\u0000\u0000Design/methodology/approach\u0000The Common Body of Knowledge of Internal Auditing Database (IIA, 2015) provides auditor responses on key variables of analysis.\u0000\u0000\u0000Findings\u0000The results of this study indicate the most critical adoption factor is data-specific IT knowledge in the IAF. Critical thinking skills and business knowledge of chief audit executive (CAEs) also contribute to adoption. IAFs with fraud risk detection responsibly are more likely to adopt. IAFs in technologically advanced cultures are more likely to adopt analytics.\u0000\u0000\u0000Originality/value\u0000The results of this study document the critical factors driving adoption of audit analytics, benefitting both industry and research.\u0000","PeriodicalId":47823,"journal":{"name":"Managerial Auditing Journal","volume":" ","pages":""},"PeriodicalIF":2.9,"publicationDate":"2021-12-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47594317","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}