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Are out-of-period adjustments a type of stealth restatement? An examination of nonaudit services and out-of-period adjustments Managerial Auditing Journal (IF 2.388) Pub Date : 2024-02-13 Cori Crews, John Abernathy, Jimmy Carmenate, Divesh Sharma, Vineeta Sharma
Purpose 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
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Pension funding gaps: do mandated external governance mechanisms matter? Managerial Auditing Journal (IF 2.388) Pub Date : 2024-02-12 Trevor England
Purpose This study aims to examine whether and how the experience of specialized external governance mechanisms mandated by the Employee Retirement Income Security Act of 1974 – the actuary and auditor – affect pension plan funding. Design/methodology/approach This study uses data from annual pension plan regulatory reports (Form 5500), Form 10-K filings, Form DEF 14A filings (company proxy statements)
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Stressors–performance relationship in public accounting firms: a quasi-longitudinal study Managerial Auditing Journal (IF 2.388) Pub Date : 2024-01-25 Adrien Bonache
Purpose This study aims to examine the changes in the correlations between stressors and performance in French chartered and accounting firms. Design/methodology/approach The linkages between role stressors and performance were analyzed through a quasi-longitudinal study of 476 chartered public accountants and trainee-chartered accountants surveyed before and after the busy season, using the partial
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Measuring novice auditor orientation and its impact on judgment Managerial Auditing Journal (IF 2.388) Pub Date : 2024-01-25 Ferdy van Beest, Robert Pinsker
Purpose The purpose of this study is to construct and test a new measure of auditor orientation using two audit quality-related tasks. Design/methodology/approach The sample consists of 66 Dutch and US graduate auditing students. Participants complete two tasks: one involving a lease classification and another, supplemental experiment involving a contingent liability judgment. The purpose is to construct
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Cognitive dissonance and auditor professional skepticism Managerial Auditing Journal (IF 2.388) Pub Date : 2024-01-09 Ruwan Adikaram, Julia Higgs
Purpose This study aims to demonstrate how pressures (incentives) in the audit environment can lower audit quality because of a breakdown between professionally skeptical (PS) judgment (risk assessment) and PS action (testing). Design/methodology/approach The authors used a Qualtrics-based experiment with attitude change as a proxy measure of cognitive dissonance (CD). The authors analyze the results
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The power of institutional investors: empirical evidence on their role in investment in internal audit function Managerial Auditing Journal (IF 2.388) Pub Date : 2024-01-12 Adel Ali Al-Qadasi
Purpose Institutional investors are major shareholders in publicly traded firms and play crucial roles in the financial and governance aspects of these firms. Despite their importance, little is known about their role in internal auditing. This study aims to fill this gap by investigating the relationship between institutional investors’ ownership and investment in the internal audit function (IAF)
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The effect of the internal audit function’s perceived assurance versus advisory purpose on the external auditor’s reliance decision Managerial Auditing Journal (IF 2.388) Pub Date : 2024-01-09 Dereck Barr-Pulliam, Marc Eulerich, Nicole Ratzinger-Sakel
Purpose This study aims to examine the extent to which external auditors (EAs) use the work of the internal audit function (IAF) based on the purpose of its primary activities. The authors rely on attribution theory, which suggests that individuals search for meaning when an event occurs. In this setting, the authors explore how the overall (assurance vs advisory) or specific (e.g. risk management
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Secrecy culture, client importance, and auditor reporting behavior: an international study Managerial Auditing Journal (IF 2.388) Pub Date : 2024-01-08 Brian M. Lam, Phyllis Lai Lan Mo, Md Jahidur Rahman
Purpose This study aims to investigate whether auditors compromise their independence for economically important clients in countries with a secrecy culture. Design/methodology/approach The authors empirically examine the research question based on a data set of 33 countries for the period from 1995 to 2018. The dependent variable is the auditors’ propensity to issue modified audit opinions, which
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Audit quality and debt restructuring: evidence from Italy Managerial Auditing Journal (IF 2.388) Pub Date : 2023-12-05 Carlotta Magri, Pier Luigi Marchini
Purpose This study aims to investigate the link between audit quality and in-court debt restructuring. The aim is to understand whether the confirmation of debt restructuring plans is affected by audit quality, which, in the light of agency theory, reduces information asymmetries between outsiders (creditors and the court) and insiders (shareholders and managers) of the debtor company. Design/methodology/approach
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Audit partners’ gender and time variances of key audit matters Managerial Auditing Journal (IF 2.388) Pub Date : 2023-11-07 Md Khokan Bepari, Abu Taher Mollik
Purpose This study aims to examine whether audit partners’ gender affects the year-to-year changes (year-to-year additions and drops) of key audit matters (KAMs) identified in the audit report. This study also examines whether female audit partners’ audit experiences, accounting education and narcissism reduce the difference in time variances of KAMs reporting between female and male audit partners
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All my rowdy friends: the effect of Super Bowl hosting on audit and financial reporting timeliness Managerial Auditing Journal (IF 2.388) Pub Date : 2023-09-20 Matthew D. Crook, Tamara A. Lambert, Brian R. Walkup, James D. Whitworth
Purpose The purpose of this paper is to examine the impact hosting the Super Bowl has on audit completion and financial reporting timeliness for companies headquartered in Super Bowl hosting cities. Design/methodology/approach Using 16 years of financial reporting data, this study uses the Super Bowl and related activities, combined with required filings during “busy season,” as a natural experiment
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Quality of internal auditing in federal educational institutions: an analysis of the perception of internal audit members and senior management Managerial Auditing Journal (IF 2.388) Pub Date : 2023-09-15 Gislaine Borges, Leander Luiz Klein
Purpose This paper aims to analyze the factors that influence the quality of internal audits in Brazilian federal educational institutions. Design/methodology/approach The study consisted of a survey whose target participants were members of the internal audits and members of the senior management of Brazilian Federal Educational Institutions. The analyses included descriptive statistics of the sample
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What affects auditor choice in emerging markets? New evidence on the role of cultural distance Managerial Auditing Journal (IF 2.388) Pub Date : 2023-08-17 Merve Acar, Utku Şendurur
Purpose This paper aims to examine whether the cultural distance between an international audit firm and target audit clients in emerging countries is associated with auditor choice decisions. Design/methodology/approach Based on a sample of 104,699 firm-year observations from 20 countries over 2009–2020, logit regression analysis is used to investigate the research questions. Findings The authors
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Earnings string breaks, accounting litigation risk and audit fees Managerial Auditing Journal (IF 2.388) Pub Date : 2023-08-10 Dahlia Robinson, Thomas Smith, James Devin Whitworth, Yiyang Zhang
Purpose This study aims to investigate whether accounting-related litigation is associated with a break in the client’s earnings string and the auditor’s response to a break in the earnings string. Design/methodology/approach The authors use regression models on a sample of publicly-traded USA companies with earnings strings. Findings The authors find that clients’ earnings string breaks are associated
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The joint effects of partner rotation and allocation of audit hours on audit quality Managerial Auditing Journal (IF 2.388) Pub Date : 2023-08-07 Minjung Kang, Sangil Kim, Ho-Young Lee
Purpose This study aims to examine the effects of allocation of audit hours to year-round audits and audit partners on audit quality when a new partner is appointed. Design/methodology/approach Using proprietary data of partners’ names and audit hours in the year-round context, the authors build a model testing input factors related to audit production and new partner assignment in 1,209 Korean listed
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Modeling the factors affecting the internal auditor silence behavior Managerial Auditing Journal (IF 2.388) Pub Date : 2023-08-08 Fahime Ebrahimi, Mehdi Sarikhani, Amin Rostami
Purpose The purpose of this study is to investigate the factors affecting the silence of internal auditors. To this end, the impacts of the perceived climate of silence, professional commitment, independence commitment, role conflict and role ambiguity on internal auditor silence have been investigated. Furthermore, the effects of role conflict and role ambiguity through independence commitment on
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Business sustainability reporting and assurance and sustainable development goals Managerial Auditing Journal (IF 2.388) Pub Date : 2023-08-08 Zabihollah Rezaee, Saeid Homayoun, Nick J. Rezaee, Ehsan Poursoleyman
Purpose This paper aims to examine the association between sustainable development goals (SDGs) at the micro level and firms’ inclination to sustainability reporting and assurance (SRA). Design/methodology/approach The authors use global data from 44 countries in the 2016–2021 period and perform the probit and logistic models in testing the hypotheses. Findings The results show that socially responsible
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Implications of directors’ education for audit fees: does the audit committee matter? Managerial Auditing Journal (IF 2.388) Pub Date : 2023-06-06 Sara Saggese, Fabrizia Sarto, Rosaria Romano, Riccardo Viganò
Purpose Building upon multiple theories (i.e. agency, signalling and human capital), this paper aims to explore the effects of directors’ education on audit fees and to assess the mediating role of audit committee (AC). Design/methodology/approach The authors use an econometric analysis of Italian-listed non-financial firms during the period 2012–2015 using single-mediator models through ordinary least
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Self-efficacy, remote audit proficiency, effort, and performance in the COVID-19 crisis: an auditor’s perspective Managerial Auditing Journal (IF 2.388) Pub Date : 2023-05-19 Saeed Rabea Baatwah, Ali Ali Al-Ansi, Ehsan Saleh Almoataz, Zalailah Salleh
Purpose The COVID-19 pandemic has introduced new challenges for auditors to provide high-quality audits. These challenges pose interesting questions about the ability of auditors to obtain audit evidence and ensure appropriate conclusions. In response to these questions, this paper aims to examine how self-efficacy affects the auditors’ effort and performance during COVID-19 and how remote audit proficiency
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The objectivity of accounting professionals based in India Managerial Auditing Journal (IF 2.388) Pub Date : 2023-05-18 Cristina Bailey, Richard G. Brody, Gaurav Gupta, Jonathan Nash
Purpose This study aims to examine the objectivity of accounting professionals based in India. Design/methodology/approach To examine the objectivity of accountants based in India, this study performs an experiment using a well-established instrument from prior literature. The authors asked accounting professionals based in India to act as either the seller or buyer in a hypothetical acquisition scenario
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Office level contagion: impact of a non-timely filing by a major busy season client Managerial Auditing Journal (IF 2.388) Pub Date : 2023-04-27 Justyna Skomra, R. Drew Sellers, Piotr Antoni Skomra
Purpose This study aims to investigate the busy season contagion effects on other clients of the Big 4 auditor’s local office associated with the non-timely (NT) filing(s) by large accelerated filer (LAF) client(s) of the office. Specifically, the authors examine the influence such events have on the audit quality and timeliness of other clients of that office. Design/methodology/approach Using panel
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Does explanatory language convey the auditor’s perceived audit risk? A study using a novel big data analysis metric Managerial Auditing Journal (IF 2.388) Pub Date : 2023-04-17 Seung Uk Choi, Hyung Jong Na, Kun Chang Lee
Purpose The purpose of this study is to examine the relationship between explanatory language, audit fees and audit hours to demonstrate that auditors use explanatory language in audit reports to explain perceived audit risk. Design/methodology/approach The authors construct the sentiment value, a novel audit risk proxy derived from audit reports, using big data analysis. The relationship between sentiment
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Governing anti-corruption and perceived auditor independence Managerial Auditing Journal (IF 2.388) Pub Date : 2023-04-07 Jihad Al-Okaily
Purpose The growing international legal agenda and the fast development of corporate governance rules are now prompting firms to put emphasis on anti-corruption procedures. On the other hand, wide-ranging concerns have been raised by regulators and policymakers regarding the effectiveness of audit committees in promoting ethical behavior and safeguarding auditor independence from the adverse consequences
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The desire of prestigious audit committee chairs: what are the benefits for financial reporting quality? Managerial Auditing Journal (IF 2.388) Pub Date : 2023-03-31 Géraldine Broye, Pauline Johannes
Purpose This study aims to examine how the prestige of audit committee (AC) chairpersons influences earnings management. Design/methodology/approach The sample contains 1,973 firm-year observations of French listed firms for the period 2007–2018. The authors examine the status of AC chairs and CEOs by focusing on the French business elite system. This study tests the association between AC chairs’
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Knowledge sharing via common auditors: evidence from corporate R&D investment Managerial Auditing Journal (IF 2.388) Pub Date : 2023-03-07 Seunghee Yang, Wonsuk Ha
Purpose Despite the importance of research and development (R&D), information on its value is not readily available to managers. This study aims to explore the role of common auditors, who audit multiple peer firms in the product market, in clients’ R&D investment decisions. This study highlights common auditors as information intermediaries who affect corporate R&D investment, focusing on the importance
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“Tone at the top”: management’s discussion and analysis and audit quality Managerial Auditing Journal (IF 2.388) Pub Date : 2023-03-07 Kinsun Tam, Qiao Xu, Guy Fernando, Richard A. Schneible
Purpose This paper aims to investigate whether the managers’ emphasis on audit in the management’s discussion and analysis (MD&A) section of the 10-K filing, as part of the firm’s “tone at the top,” is linked to audit quality. Design/methodology/approach Adopting a computational linguistics approach, the authors measure the manager’s audit emphasis as the frequency of audit-related words in the MD&A
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The impact of COVID-19 restrictions on audit fees and audit delay: evidence from auditor local offices Managerial Auditing Journal (IF 2.388) Pub Date : 2023-02-13 Maretno Agus Harjoto, Indrarini Laksmana
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
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Auditor – client match: timing of auditor change following mismatch and improvement through the change Managerial Auditing Journal (IF 2.388) Pub Date : 2023-02-08 Kam-Wah Lai, Patrick W. Leung
Purpose This paper aims to first investigate auditor change following mismatch by focusing on the number of times mismatch occurred prior to auditor change and on clients mismatched continuously with auditors for two or more years. Subsequently, it studies the relation of mismatch in the current year with auditor change for clients mismatched in the past year. These issues are important because of
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The mediating effect of data analytics on the relationship between organizational psychological safety and advisory services Managerial Auditing Journal (IF 2.388) Pub Date : 2023-01-10 Ranto Partomuan Sihombing, Dian Agustia, Noorlailie Soewarno
Purpose Data analytics can change the working of advisory services (AS) that internal auditors routinely carry out. Not getting psychological support from employers and co-workers can cause internal auditors to be reluctant to use data analytics. Based on trait activation theory, this study aims to examine the mediating effect of data analytics on the relationship between organizational psychological
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Audit partner characteristics, career advancement and audit quality in the USA Managerial Auditing Journal (IF 2.388) Pub Date : 2022-12-21 Chen Cai, Stephen Ciccone, Huimin Li, Le Emily Xu
Purpose This study aims to explore the relation among US audit partners’ characteristics, their career advancement and audit quality. Design/methodology/approach This study uses data from Public Company Accounting Oversight Board Form AP, Auditor Reporting of Certain Audit Participants, and publicly available online data sources. The hand-collected data on audit partners’ personal characteristics include
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Psychological capital, moral courage and internal audit effectiveness (IAE): a complementary or substitution effect Managerial Auditing Journal (IF 2.388) Pub Date : 2022-12-13 Imen Khelil
Purpose This paper aims to examine the impact of two psychological drivers, namely, psychological capital (PsyCap) and moral courage on internal audit effectiveness (IAE) and whether there is a substitution effect or complementary role of these psychological factors on IAE in the Tunisian setting. Design/methodology/approach IAE is measured using managers’ perceptions of the internal audit function
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The effect of the rules- versus principles-based accounting standards on opinion shopping Managerial Auditing Journal (IF 2.388) Pub Date : 2022-11-15 Heesun Chung, Yewon Kim
Purpose The purpose of this study is to examine whether the change in accounting standards from the rules-based local GAAP to the principles-based IFRS influences a manager’s opportunistic auditor choice for a favorable audit opinion, opinion shopping (OS) behavior. The authors view that IFRS adopters exploit the flexibility of IFRS to their advantage and search for auditors that are more likely to
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Impact of COVID-19 pandemic on auditors’ responsibility: evidence from European listed companies on key audit matters Managerial Auditing Journal (IF 2.388) Pub Date : 2022-04-28 Camelia-Daniela Hategan,Ruxandra-Ioana Pitorac,Andreea Claudia Crucean
PurposeThis research seeks to assess 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.D
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Judicial hellholes and other differential characteristics: is state-level legal risk reflected in audit fee pricing? Managerial Auditing Journal (IF 2.388) Pub Date : 2022-04-12 James C. Hansen,Susan M. Murray,Sang Hyun Park,Nari Shin
PurposeThis study aims to examine the effect of state-level legal risk on audit fee pricing in the USA. This study hypothesizes that auditors are more likely to charge higher audit fees to clients headquartered in states with higher legal risk in terms of probability of being sued, expected size of damages allocated to the auditors and breadth of third parties able to claim damages.Design/methodology/approachThis
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Impacts of reporting lines and joint reviews on internal audit effectiveness Managerial Auditing Journal (IF 2.388) Pub Date : 2022-03-18 Yusun Jung,Moon-Kyung Cho
PurposeThis paper aims to examine the extent to which two commonly recommended information sharing and communication interventions, direct reporting lines between the internal audit function (IAF) and the audit committee (AC) and their joint reviews of internal audit standards and procedures, improve the internal audit in the continuous audit control and monitoring efforts.Design/methodology/approachThis
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Auditee’s payout policies: does audit quality matter? Managerial Auditing Journal (IF 2.388) Pub Date : 2022-03-17 Mohammad Hendijani Zadeh
PurposeThis study aims to explore whether an auditee’s audit quality influences its payout policies (i.e. each form of dividend payouts and stock repurchase payouts).Design/methodology/approachBased on a panel data of US public firms, from 2004 to 2018, and Tobit estimators, this study aims to examine whether auditees’ audit quality is related to their payouts and under which circumstances (from the
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Lessons from leveraging technology in auditing during COVID-19: an emerging economy perspective Managerial Auditing Journal (IF 2.388) Pub Date : 2022-03-02 Neeraj Sharma,Garima Sharma,Mahesh Joshi,Sharad Sharma
PurposeThis study aims to examine the challenges posed by COVID-19 restrictions for audit processes in India and explore the perceptions of the profession on how technology was leveraged to conduct audits during this period. The opinions of auditors on future changes in post-COVID-19 audit practices and processes are also explored.Design/methodology/approachSemi-structured interviews were conducted
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Board gender diversity and firm risk: international evidence Managerial Auditing Journal (IF 2.388) Pub Date : 2022-03-02 Zhongtian Li,Jing Jia,Larelle Chapple
PurposeThis paper aims to uncover the global trend on the relationship between board gender diversity and firm risk. In addition, this paper investigates how country characteristics affect the relationship between board gender diversity and firm risk.Design/methodology/approachThis study uses a large sample of firms in 45 countries for the period from 2002 to 2018. Ordinary least square regression
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Audit fees, board ethnicity and board independence: evidence from South Africa Managerial Auditing Journal (IF 2.388) Pub Date : 2022-02-23 Balachandran Muniandy
PurposeThe purpose of this paper is to examine the relationship between ethnic diversity on corporate boards and audit fees in the context of South Africa. Additionally, this paper investigates how the interaction between board ethnicity and board independence affects audit fees.Design/methodology/approachThis study uses a quantitative research method with a panel data analysis to test proposed hypotheses
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The impact of COVID-19 pandemic on earnings management and the value relevance of earnings: US evidence Managerial Auditing Journal (IF 2.388) Pub Date : 2022-02-17 Guoping Liu,Jerry Sun
PurposeThe purpose of this study is to examine whether the COVID-19 pandemic has affected earnings management and the value relevance of earnings in the USA.Design/methodology/approachDiscretionary accruals, the explanatory power and slope coefficient of earnings are compared between 2019 (prepandemic year) and 2020 (pandemic year). Univariate and regression analyses are performed.FindingsThere was
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Analyst forecasting during COVID-19 pandemic Managerial Auditing Journal (IF 2.388) Pub Date : 2022-02-16 Rubin Hao,Jing Xue,Ling Na Belinda Yau,Chunqiu Zhang
PurposeThis study aims to examine the characteristics of financial analysts’ earnings forecasts after COVID-19 outbroke in the USA. Specifically, the authors examine how financial analysts tradeoff between accuracy and responsiveness under investors’ heightened information demand when there is market-wide uncertainty. In addition, the authors investigate how COVID-19 may affect analysts’ cognitive
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The coherence of the auditor-client relationship quality and auditor tenure with client’s perceptions on added-value in SME audits: a sociological perspective Managerial Auditing Journal (IF 2.388) Pub Date : 2022-02-08 Niels van Nieuw Amerongen,Erdi Coskun,Joost van Buuren,Hans B. Duits
PurposeThe 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.Design/methodology/approachThis study is based on both archival data (auditor tenure) and interview data (strength of the auditor–client relationship and client’s perceptions
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Relevance of supplementary fair value disclosures under market uncertainty: effects on audit fees and investors’ pricing Managerial Auditing Journal (IF 2.388) Pub Date : 2022-02-07 Laura Mehnaz,Asheq Rahman,Humayun Kabir
PurposeConcerns 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
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Insights into neo-institutional theory in accounting and auditing regulation research Managerial Auditing Journal (IF 2.388) Pub Date : 2022-02-02 Elina Haapamäki
PurposeNeo-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
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Effects of qualitative factors and auditors’ personal characteristics on materiality judgments Managerial Auditing Journal (IF 2.388) Pub Date : 2022-02-01 Mohamed Abdel Aziz Hegazy,Samar Salama
PurposeThe 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.Design/methodology/approachA
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Key audit risks and audit procedures during the initial year of the COVID-19 pandemic: an analysis of audit reports 2019-2020 Managerial Auditing Journal (IF 2.388) Pub Date : 2022-01-18 Michael Kend,Lan Anh Nguyen
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
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Earnings management and investor protection during the COVID-19 pandemic: evidence from G-12 countries Managerial Auditing Journal (IF 2.388) Pub Date : 2022-01-13 Heba Ali,Hala M.G. Amin,Diana Mostafa,Ehab K.A. Mohamed
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
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The effect of audit firm attributes on audit delay in the presence of financial reporting complexity Managerial Auditing Journal (IF 2.388) Pub Date : 2022-01-10 Chu Chen,Hongmei Jia,Yang Xu,David Ziebart
PurposeThis study aims to examine the effects of audit firm attributes on audit delay associated with financial reporting complexity (FRC).Design/methodology/approachThe authors use regression models with a sample of public firms with distinct monetary eXtensible Business Reporting Language tags to test the research hypotheses.FindingsThe authors find that two audit firm attributes (audit firm tenure
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Auditor switching, lowballing and conditional conservatism: evidence from selected Asian countries Managerial Auditing Journal (IF 2.388) Pub Date : 2022-01-04 Khairul Anuar Kamarudin,Ainul Islam,Ahsan Habib,Wan Adibah Wan Ismail
PurposeThis 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.Design/methodology/approachUsing
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Political connections, political uncertainty and audit fees: evidence from Pakistan Managerial Auditing Journal (IF 2.388) Pub Date : 2021-12-28 Fawad Ahmad,Michael Bradbury,Ahsan Habib
PurposeThis 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).Design/methodology/approachThe authors measure the association
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Factors associated with the adoption of data analytics by internal audit function Managerial Auditing Journal (IF 2.388) Pub Date : 2021-12-21 Sharif Islam,Thomas Stafford
PurposeThe 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.Design/methodology/approachThe Common Body of Knowledge of Internal Auditing Database (IIA, 2015) provides auditor responses on key variables of analysis.FindingsThe results of this
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The effect of cash versus equity compensation on audit committee decision-making - evidence from the 2007 Deloitte censure Managerial Auditing Journal (IF 2.388) Pub Date : 2021-12-13 Matthew J. Behrend,Marshall K. Pitman
PurposeThis study aims to investigate the effect of cash versus equity compensation on audit committee decision-making after the Public Companies Oversight Board’s 2007 censure of Deloitte.Design/methodology/approachUsing a sample of 2,588 firms, this paper uses two different compensation measurements to empirically examine the effect of audit committee compensation on decision-making.FindingsThe authors
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The joint effect of supervisor influence and investor perspective: unintended consequences on assessing accounting estimates Managerial Auditing Journal (IF 2.388) Pub Date : 2021-12-07 Lei Dong,Lei Wang,Wen-Wen Chien
PurposeThe purpose of this paper is to examine the joint effect of supervisor influence and investor perspective on novice auditors’ assessments of accounting estimates.Design/methodology/approachThe experiment used a 2 × 2 between-subjects design, randomly assigning proxies of novice auditors among four conditions. The authors manipulated the supervisor’s level of emphasis on evidence that suggests
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Audit sampling strategies and frauds: an evidence from Africa Managerial Auditing Journal (IF 2.388) Pub Date : 2021-11-30 Padmi Nagirikandalage,Arnaz Binsardi,Kaouther Kooli
PurposeThis paper aims to investigate how professionals such as accountants, auditors, senior civil servants and academics perceive the use of audit sampling strategies adopted by professionals to increase detection rates of frauds and corruption within the public sector in Africa. It also examines the respondents’ perceived values regarding the reasons for committing frauds, types of fraud and corruption
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The combined effect of perspective-taking and incentives on professional skepticism Managerial Auditing Journal (IF 2.388) Pub Date : 2021-11-19 Shuk Ying Ho,Soon-Yeow Phang,Robyn Moroney
PurposeThis paper aims to investigate the combined effect of two interventions, perspective taking and incentives, on auditors’ professional skepticism (hereafter skepticism) when auditing complex estimates. Specifically, this paper examines the different ways that perspective taking (management versus inspector) and incentives (absent versus reward versus penalty) combine to impact skepticism.Des
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CEO characteristics, management support for internal audit and corporate performance: an analysis of listed Malaysian companies Managerial Auditing Journal (IF 2.388) Pub Date : 2021-11-17 Abdulaziz Alzeban
PurposeThis study aims to advance the discussion on internal audit (IA) findings by empirically investigating the relationship between chief executive officer (CEO) characteristics and the IA function, particularly IA findings and implementing IA recommendations and examining whether CEO and management support for IA moderate the effect of the recommendations on corporate performance.Design/methodology/approachData
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Audit committee characteristics, enterprise risk management and stock price synchronicity Managerial Auditing Journal (IF 2.388) Pub Date : 2021-11-17 Zeshan Ghafoor,Irfan Ahmed,Arshad Hassan
PurposeThis study aims to examine the impact of audit committee (AC) characteristics and enterprise risk management (ERM) on stock price synchronicity (SYNCH).Design/methodology/approachBased on a sample of 437 US-based firms over the period 2010 to 2017, the current study uses fixed-effect and ordinary least square to test the formulated hypotheses. Majority of the sample firms are based on the S&P
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Trade-offs in the relationship between competition and audit quality Managerial Auditing Journal (IF 2.388) Pub Date : 2021-10-11 Nam Ho
PurposeFears over public accounting becoming increasingly concentrated have inspired several attempts to study the relationship between competition and audit quality. These studies have yielded conflicting results without a clear reason as to why. This paper aims to propose a new approach and empirically demonstrate a non-monotonic association between competition and audit quality.Design/methodology/approachUsing
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The relationship between justice perceptions and organizational commitment among alternative work arrangement participants and non-participants Managerial Auditing Journal (IF 2.388) Pub Date : 2021-09-16 Leslie H. Blix,Marc Ortegren,Kate Sorensen,Brandon Vagner
PurposeThe purpose of this paper is to examine the effect of auditor alternative work arrangement (AWA) participants’ and non-participants’ perceptions of procedural and distributive justice on organizational commitment.Design/methodology/approachUsing survey data from 110 auditors in the USA, this study uses a regression model to explore how AWA participants’ and non-participants’ perceptions of procedural
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Key audit matters: did IAASB unravel the knots of confusion in audit reports decisions? Managerial Auditing Journal (IF 2.388) Pub Date : 2021-09-13 Mohamed Abdel Aziz Hegazy,Noha Mahmoud Kamareldawla
PurposeThis study aims to investigate how external auditors properly classify the requirements of ISA 701 for key audit matters (KAM) compared with an emphasis of matter or other matters (EOM) in ISA 706 and going concern (GC) in ISAs 706 and 570. Such investigation is important to assess whether the explanatory matters included in ISAs 701, 706 and 570 are appropriate for external auditors so they