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The COVID-19 pandemic limits public social activities due to the virus spreading in overcrowded areas. It becomes a challenge for Public Accounting Firms to provide quality financial statement audit services to auditees. Therefore, this study aimed to analyze the influence of auditors' competence as well as audit fee and quality control on audit quality during the COVID-19 pandemic. Data were collected through a survey filled by 100 auditors at Public Accounting Firms (KAP) in Indonesia. The survey was distributed through Google Forms for two months in 2021. The data were processed and analyzed using the Partial Least Square (PLS) method with Smart PLS 3 software. The results indicated that auditors' competence and audit quality control positively affect audit quality. Meanwhile, the audit fee does not significantly affect audit quality. This study implies that Public Accounting Firms should optimize employees' soft skills in recruitment and training activities. Additionally, the firms are expected to improve supervision and increase the auditors' work commitment to strengthen audit engagement quality. © 2023 SCMS Group of Educational Institutions. All rights reserved.
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PurposeThis study aims to investigate the impact of risk-taking and auditor characteristics on value creation in companies listed on the Tehran Stock Exchange. In addition, it investigates the moderator role of auditor characteristics in the impact of risk-taking on value creation, especially in pre-Covid 19 and post-Covid 19 pandemic.Design/methodology/approachThe information about 199 company in 2014–2021 was examined. In the present study, in accordance with the related theoretical literature and the importance of auditor specialization, auditor tenure and auditor reputation, these factors were considered as the auditor characteristics.FindingsThe present findings based on the generalized least squares (GLS) method showed that risk-taking positively affects the value creation. The auditor characteristics (auditor specialization, auditor tenure and auditor reputation) have a significant positive effect on the value creation. Furthermore, the auditor characteristics enhance the impact of risk-taking on value creation. The results of generalized method of moments method and robust regression analysis are consistent with the GLS results. To take into account the Covid-19 conditions, the data were divided into pre-Covid-19 and post-Covid-19 years. The results showed that auditor characteristics moderate the impact of risk-taking on value creation in pre-Covid 19 and post-Covid 19.Originality/valueThe study highlights the role of auditor characteristics in the value creation, especially in the emerging market. Given that Covid-19 has seriously damaged global economic well-being and has put companies at a double risk, the present findings can be useful for managers, investors and the international community, and help company managers make risk-taking policies and select auditors with appropriate characteristics.
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Purpose - To the best of the authors' knowledge, this is the first study that aims to present a comprehensive view of the auditing ethics literature by unboxing 40 years of efforts in the field. Design/methodology/approach - This study combined bibliometric, social network and content analysis by analyzing 114 articles published in accounting and top business ethics journals on the Web of Science database from 1980 to 2021.Findings - The results show a rising interest in this topic and reveal auditors' ethical decision-making and moral reasoning as the most discussed topics in the literature. The work also clusters the literature according to keywords and scopes, identifying literature gaps and suggesting new avenues for future research.Practical implications - The research results assist provide an overarching image of the auditing ethics field. In addition, these results draw possible future avenues to bridge the void in the current auditing ethics literature by presenting indispensable directions for potential research. For example, future research could pay more attention to whistleblowing, fraud, personal auditor characteristics, auditor ethical sensitivity, auditor ethical conflict, ethical climate and underreporting of time. Moreover, the rapidly changing business environment necessitates the auditing ethics research to move to more practical implications to mitigate previous mistakes and avoid any future risks.Originality/value - All crises are an ideal breeding ground to motivate fraud and audit failures. In fact, auditing ethics research has been subordinated to the different economic crises. However, despite increasing awareness of the topic's relevance, no comprehensive study focuses on auditing ethics literature. Now, the devastating effects of the COVID-19 crisis are producing a new wave of financial distresses and avoiding former mistakes is timelier than ever. With this novel and integrated approach, this work goes one step forward, developing a comprehensive picture of the auditing ethics literature.
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PurposeThis study aims to examine whether clients' degree of digitalization and audit firms' expertise in information technology (IT) influence audit quality (AQ).Design/methodology/approachData of Chinese A-share firms listed on the primary board of the Shanghai and Shenzhen stock exchanges from 2011 to 2019 are taken as the sample. All the data are obtained from the China Stock Market and Accounting Research. Clients' digitalization is determined using the keywords "AI technology,” "blockchain,” "cloud computing,” "big data technology” and "digital technology.” Auditor firm's digital expertise is determined by the proportion of higher IT expertise. As the proxy for AQ, this study uses audit fees, given that its quantum reflects the effort auditors expend that in turn affects the AQ.FindingsA fixed-effect regression model shows that clients with high digitalization attain AQ. This study also finds a significant and positive coefficient of audit fees, indicating that AQ is high in the same situation if an audit firm's IT is mature and developed. Furthermore, results confirm the moderating effect of clients' digitalization and auditors' expertise and on AQ. Auditors' expertise in IT mitigates the audit risk and increase AQ.Originality/valueFindings can enhance AQ and corporate governance literature by clarifying how external audits must evolve through digitalization and incorporating newly developed digital tools such as big data, analytics, artificial intelligence and robotic process automation. This study also provides important insights regarding how the development of new digital tools allow the audit profession to perform as a corporate governance mechanism.
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Purpose: The aim of the present study is to explore the impact of the COVID-19 pandemic on the first stage of external audit, namely, on the auditors' client acceptance and continuance decisions (CACDs). Design/methodology/approach: Survey data was collected on the basis of a structured questionnaire, which was answered by 21.02% of the Greek certified auditors/accountants. Parametric hypothesis testing and regression analysis were used in data analysis. Findings: The results of the survey showed that the COVID-19 pandemic had a different impact on the client acceptance decision-making (CAD) process and the client continuance decision-making (CCD) process. The CAD process appears to have been affected in a mostly negative way, and to a greater extent than is the case with the CCD process. The impact of the COVID-19 pandemic on the CACD process appears to be mainly related to the difficulty arising in auditor–client communication. Additionally, as far as the CAD process is concerned, the COVID-19 pandemic appears to have had a negative impact on the audit fees, while, when it comes to the CCD process, the pandemic has had a positive impact with regard to clientele expansion. Finally, survey findings showed that the COVID-19 pandemic affected in a different way Big6 and non-Big6 auditors. Originality/value: The present study aspires to fill significant gaps identified in relevant literature with regard to auditors' work in correlation with the COVID-19 pandemic. More specifically, to the best of the author's knowledge, it is the first study exploring the impact of the COVID-19 pandemic on the first stage of external audit. Moreover, the study is based on primary data collected in real time, under the actual conditions of emergency related to the health crisis. Last but not least, the findings of the present study could be of value to professionals and regulative authorities in case of similar future emergencies or potential crisis situations. © 2023, Emerald Publishing Limited.
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The pandemic of Covid-19 requires people in any profession to do large-scale social restrictions, this also lead in financial/external auditors experiencing difficulties in conducting audits in the common daily activity, which is by visiting clients physically to make observations. In this condition, online observation using remote audit become one of the solution. The purpose of this study is to analyze the effectiveness and efficiency of external auditors in transition to remote auditing due to the Covid-19 Pandemic. The data collection technique is using primary data from questionnaire. We distribute questionnaire to Public Accounting Firms located in DKI Jakarta using simple random sampling method technique. The method for data analysis is using partial least squares conducted with Software of SmartPLS 3. The result of this study indicates that remote audit efficiency and remote audit efficiency have positive and significant effect on audit quality. Meanwhile, institutional support has no significant effect on audit quality. © 2022 IEEE.
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The purpose of this study was to determine the effect of auditors' professional skepticism, audit risk, and auditor competence on audit quality in conducting remote audits in the midst of the COVID-19 pandemic. To determine this effect, the researcher used the Simple Random Sampling method by analyzing the data using primary data with a questionnaire as a tool to collect data. The results of this study indicate that the application of professional skepticism and auditor competence has a significant effect on audit quality. So that these two things are very important to note so that the resulting audit quality is good. Meanwhile, audit risk has no significant effect on audit quality during the COVID-19 pandemic. Audit risk can be minimized by using audit technology that is increasingly sophisticated from time to time. © 2022 ACM.
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The era of industrial revolution 4.0 has introduced new technology that makes all of the activities in this world change. At the same time, the Covid-19 pandemic outbreak has made social distancing which make auditors must adopt technology digital to be able perform remote audit. Based on that explanation, we conducted research on the effect of remote audit, work experience, work overload, transformational leadership, and emotional intelligence on auditor performance. Our research used quantitative method, we use primary data from questionnaires that were distributed to auditors who work in Public Accounting Firms in Jabodetabek. The data analysis method used was Structural Equation Model (SEM) based on Partial Least Square (PLS) with SmartPLS 3.2.9 software. Our results showed that work experience, transformational leadership, and emotional intelligence have a significant effect on auditor work performance, while remote audit and work overload have no significant effect on auditor performance. © 2022 ACM.
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The COVID-19 pandemic that has hit Indonesia since last year has had an impact on the economy and business continuity of companies in Indonesia. Auditors tend to issue a going concern opinion when they doubt the continuity of the company business being audited, especially during the COVID-19 pandemic. According to preliminary studies, a company's financial condition and growth tend to influence auditors' opinions. Therefore, this study aims to examine the factors influencing the issuance of going concern opinion by auditors, especially financial factors such as profitability and company growth. Data were collected from the financial statement of manufacturing companies listed on the Indonesia Stock Exchange from 2018 to 2020. The test tool used to determine the influence of independent variables on the dependent variable is the logistic regression. The results showed that the company's profitability influences auditor's going-concern opinion and company's growth do not influence auditors' going-concern opinion. This is because during the pandemic, many property companies hampered in continuing development, thereby reducing the company's revenues and profits, which had an impact on the company's hesitation to continue its business. This study is expected to provide information to users of financial statements that the auditor will give a signal to users of financial statements if there are doubts about the viability of the company in the form of giving a going-concern opinion. © 2022 ACM.
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A study has aimed at identifying the extent of effectiveness and ability of internal control to supervise digital banking applications and services which have been highly used in Jordanian banks due to the Corona. A descriptive analytical approach has been used due to the nature of the study;a questionnaire has been designed as a tool of data collection and distributed to study sample, composed of internal auditors, chief accountants, and financial managers in Jordanian commercial and Islamic banks. 96 questionnaires have been distributed. Statistical package for the social sciences (SPSS). The study has found that digital banking applications and services used by Jordanian bank have contributed to the achievement of internal control system's goals. In addition, it has indicated that digital banking applications and systems, used by Jordanian banks, are characterized by information properties which make internal control system more effective and efficient during the Corona pandemic. Moreover, the study has shown that public or regulatory administrative control procedures have achieved the effectiveness of digital banking applications and services used by Jordanian banks in the light of the Corona pandemic;and the procedures and systems of data security and safety have highly affected the effectiveness of digital banking applications. © 2023, The Author(s), under exclusive license to Springer Nature Switzerland AG.
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The audit profession has experienced a digital transformation over the last decade with a rapid shift towards remote auditing forced by the recent COVID pandemic. This shift has led to changes related to the way auditors work and perceive. Through a survey of external auditors, this study addresses how the changes from on-site audits to remote audits affect audit success (i.e., audit quality, audit efficiency, and auditors' job satisfaction);we also explore dispositional and situational factors that contribute to remote audit success. Our results show that working remotely leads to high audit efficiency. Auditors' flexibility management competency leads to high remote audit quality and efficiency;and a physical working environment conducive for concentrating on audit tasks is positively associated with audit efficiency and auditors' job satisfaction for remote audits. We also found that working remotely could enhance audit quality and efficiency when the audit firm provides sufficient support to auditors. Our study provides insights for audit firms, regulators, and other stakeholders as they evaluate the many challenges the audit profession faces in achieving remote audit success. © 2023 John Wiley & Sons Ltd.
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Purpose: This study aims to examine the impact of COVID-19 public health restrictions on audit fees and audit delay at the auditor local office level. Design/methodology/approach: The authors take advantage of the availability of the state-by-state lockdown data to measure the degree of public health restrictions in auditor office locations. Using multivariate regression analysis, this study empirically investigates the impact of the length of lockdown in auditors' office locations on audit fees and audit delay. The authors also examine whether office-level characteristics (i.e. office size and office-level client importance) moderate the association between the length of statewide lockdown and both audit fees and audit delay. Findings: The authors find that a longer lockdown in auditors' office locations is associated with higher audit fees and longer audit delay. The increase in audit fees and audit delay due to lockdown is higher for clients of larger local offices than those of smaller offices. In contrast, the positive impact of lockdown on audit fees and audit delay is less for more economically significant clients of an auditor office than that for less significant clients. Smaller clients are more likely to bear the higher cost of audits and experience longer audit delay during the pandemic. Originality/value: The results suggest that COVID-19 restrictions have forced auditors to change the nature, scope and timing of their tests, resulting in higher audit fees and longer delays in completing audit engagements. Beyond the main effect of lockdowns on audit fees and audit delay, the study finds evidence of the moderating effect of auditor office size and office-level client importance, providing some insights on how auditor local offices cope with COVID-19 restrictions. © 2023, Emerald Publishing Limited.
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This study uses a modified UTAUT model to examine the variables that influence external auditors' approval of audit software. The survey approach is used in this study to gather data, and SmartPLS 3 is used to process the data. Purposive sampling was used to choose 180 respondents from the study's population of auditors who work for DKI Jakarta Public Accounting Firm and often use audit software. The findings indicated that social influence and the ease of internet access had an impact on behavioral intention, while performance expectations and effort expectations had no discernible affect on behavioral intention to adopt audit software. Additionally, this study demonstrates that supportive conditions had an impact on use behavior, whereas behavioral intention had little to no impact on how people used audit software. Gender, but not other relationships, can attenuate the influence of effort expectancy on behavioral intentions. The size of the audit organization has no bearing on the effects of behavioral intention and software usage. © 2022 IEEE.
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The COVID-19 pandemic has put an auditor under pressure to help clients with financial reports. The objective of this research is to investigate the effect of workload and burnout on auditor performance during the COVID-19 pandemic of external auditors in Jakarta. This research employs a quantitative method with a convenience sampling approach. The sample of this study was 101 respondents from 34 public accounting firms in the Jakarta Capital Special Region that were active and registered on the website database of the Financial Services Authority (OJK). The results showed that workload had a positive effect on auditor performance while burnout has a negative effect on auditor performance. This shows that the high workload tends to affect the auditor's motivation to improve the auditor's performance and the high burnout tends to affect the auditor's performance decline. © 2023 The Authors.
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The study intends to investigate how much stress people working in the auditing industry in the Republic of Serbia perceive to be brought on by Covid19. An adjusted Cohen’s perceived stress scale was used. The answers to the questionnaire were analyzed by the method of descriptive statistics and by applying a simple regression analysis on the ratio of the age of the respondents and the evaluation of the answers to the tested statements. The main finding is that Covid19 significantly worsened stress levels and mental health of auditors. They believe that Covid19 significantly increased their stress levels during daily planning and implementation of work and personal obligations. This study can be used as a concept and a guide by external audit firms and internal audit departments to help those engaged in audit work to overcome stressful situations and master stress management techniques through training and interviews with professionals and by developing a stronger organizational culture. © 2023, The Author(s), under exclusive license to Springer Nature Switzerland AG.
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Purpose This study aims to investigate the impact of risk-taking and auditor characteristics on value creation in companies listed on the Tehran Stock Exchange. In addition, it investigates the moderator role of auditor characteristics in the impact of risk-taking on value creation, especially in pre-Covid 19 and post-Covid 19 pandemic. Design/methodology/approach The information about 199 company in 2014-2021 was examined. In the present study, in accordance with the related theoretical literature and the importance of auditor specialization, auditor tenure and auditor reputation, these factors were considered as the auditor characteristics. Findings The present findings based on the generalized least squares (GLS) method showed that risk-taking positively affects the value creation. The auditor characteristics (auditor specialization, auditor tenure and auditor reputation) have a significant positive effect on the value creation. Furthermore, the auditor characteristics enhance the impact of risk-taking on value creation. The results of generalized method of moments method and robust regression analysis are consistent with the GLS results. To take into account the Covid-19 conditions, the data were divided into pre-Covid-19 and post-Covid-19 years. The results showed that auditor characteristics moderate the impact of risk-taking on value creation in pre-Covid 19 and post-Covid 19. Originality/value The study highlights the role of auditor characteristics in the value creation, especially in the emerging market. Given that Covid-19 has seriously damaged global economic well-being and has put companies at a double risk, the present findings can be useful for managers, investors and the international community, and help company managers make risk-taking policies and select auditors with appropriate characteristics.
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Purpose/objectives: The objectives of this article are to obtain an understanding of difficulties encountered by auditors during the Covid-19 pandemic and to determine how they addressed these difficulties. This is to add to and verify the accuracy of the existing body of literature that speculates on the possible effects of the pandemic on external auditors. Design/methodology/approach: Literature from several professional bodies, practitioners and academics is examined. The effects of Covid-19 on audits are explored through examining auditors' reports, including the Key Audit Matters (KAMs) raised by auditors during audits conducted since the start of the pandemic. Findings: A selection of audit reports of companies listed on the Johannesburg Stock Exchange (JSE) reveals how Covid-19 plagued the audits of 2020. The audit reports themselves confirm these concerns and reveal that Covid-19 is not only linked to a significant number of key audit matters but could also be significantly associated with the type of key audit matter raised. Practical implications: This article aims to bridge the gap between speculations on the effects of Covid-19 on financial external audits and the actual effects of Covid-19. This provides insight into what the real challenges faced by auditors were during the pandemic and how significant they were to conduct an effective audit over this period. Through this, understanding future audits in stressed environments, such as pandemics, can be better managed. Originality/value: To the author's knowledge, no such research examining the actual effects of Covid-19 on external financial audits have yet been conducted and this research, therefore, adds to the current body of academic research by enhancing the value of audit reporting and adding credibility to the current speculative literature around the perceived effects of Covid-19 on audits.
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Purpose: The study seeks to examine the effect of the Covid-19 on organisational commitment with the mediating role of job satisfaction of Iraqi auditors to determine the impact the Corona has on the organisational commitment of Iraqi auditors with the mediating role of job satisfaction. Design/methodology/approach: The study's statistical population consists of those auditors working in the auditing organisations and private sector auditing institutions in Iraq. The number of respondents was 1,500 and 305 questionnaires were collected and analysed using Cochran's formula. Data were collected using the Covid1-19 questionnaire developed by the researcher, Minnesota Life Satisfaction Questionnaire (1967) and Allen and Meyer (1990) Organisational Commitment Questionnaire. In this study, the components of individual fear, collective fear and the transition from a feeling of security to insecurity with 29 questions for the impact of Covid-19 and job satisfaction components derived from the Minnesota Model, which includes six components (payment system, nature of job, progress opportunities, organisational atmosphere, leadership style and physical condition) is based on 19 questions. The components of organisational commitment are based on three types of emotional commitment, continuance commitment and normative commitment with 24 questions. Structural equation modelling using Smart-PLS software was used to analyse the data. Findings: The results showed that the Covid-19 effect variable was not significant on organisational commitment but was significant considering the mediating role of job satisfaction. Originality/value: The paper has covered a very interesting topic nowadays and the results may give great insight to auditors in a challenging condition due to COVID 19. © 2022, Emerald Publishing Limited.
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This paper examines factors affecting audit quality in Palestinian audit firms in the Gaza Strip during COVID-19 pandemic. Using the descriptive-analytical technique, a questionnaire was designed to collect data from all Palestinian audit firms in the Gaza Strip. Multiple regression analysis was used to evaluate the data collected from 117 respondents. The findings revealed that the independent variables (i.e. auditor experience, objectivity and independence of the auditor, and the auditor’s awareness of the importance of audit quality) had an impact on audit quality. While this study expands on previous research, it also yields that data might benefit academics and practitioners in their efforts to improve audit quality. © 2023, The Author(s), under exclusive license to Springer Nature Switzerland AG.
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Purpose - This research seeks to asses the impact of the COVID-19 pandemic on the quality of financial reporting and the auditor's responsibility. This paper aims to investigate how the auditors identified the impact of COVID-19 on the companies' annual financial statements and considered this impact as a key audit matters (KAM) in the reports issued and the factors that influenced their reporting. Design/methodology/approach - The empirical research consists of a qualitative analysis of KAMs and a quantitative one based on a panel data econometric model using a random effects maximum likelihood regression. The sample includes companies listed on the primary market on European stock exchanges in 2019-2020. Findings - The results suggest a direct positive correlation between numbers of KAMs and the auditor's size, frequency of the event and going concern uncertainty. Two of the variables were not validated: auditor rotation and audit fees. Research limitations/implications - The limitation of research can be the sample structure, and the model we proposed does not take into account all possible influencing factors. Practical implications - This study will help researchers, policymakers and business owners have a deeper understanding of auditors' responsibility in their work. As practical implications of the COVID-19 impact following the implementation of telework, audit firms have begun to invest in digital programs to assist them in their teamwork and communication with clients. One impact on regulators has been to relax reporting requirements by extending deadlines. Originality/value - This research contributes to the academic literature by providing a synthesis and econometric model of the effects identified by auditors, following the COVID-19 pandemic, expressed by KAMs in their reports.