Search results for "Quality audit"
showing 10 items of 30 documents
Struggle over joint audit: on behalf of public interest?
2012
International audience; European Commission (EC 2011) has recently suggested joint audit - broadly defined as an audit where two independent auditors are jointly liable for the audit report - as a way a way to increase audit quality after the financial crisis and to mitigate audit market concentration, by enlarging the audit offer. Big 4 audit firms have fought this proposal by arguing its unbearable cost while 2nd Tier audit firms have supported it by arguing its added quality. This conflicting position leads us to question their claim of public interest concern. As group-interest economic regulation theories predict that the absence of any effect of a new regulation (here: joint audit) is…
The Impact of Audit Committee Characteristics on the Enhancement of the Quality of Financial Reporting: an empirical study in the Spanish context
2007
The purpose of this paper is to analyse the relationship between the likelihood that a company will receive a qualified audit report (as a measure of the quality of financial information) and the existence and characteristics of the audit committee (AC). For listed companies that voluntarily created an AC in the period following the publication in 1998 of the Spanish Code of Corporate Governance, known as the Olivencia Code, we find that ACs size, the percentage of independent members in ACs, company size, losses reported in either or both of the previous two years, receiving the same qualified audit opinion as in the previous year and ownership concentration affect the likelihood of receiv…
Consequences of the Abandonment of Mandatory Joint Audit : An Empirical Study of Audit Costs and Audit Quality Effects
2016
Abstract This paper focuses on the unique Danish setting in examining the consequences of abandoning a mandatory joint audit regime. We study the effects on audit costs (measured by audit fees) and audit quality (measured by abnormal accruals) of the abandonment of the mandatory joint audit in Denmark in 2005. We perform our analysis on non-financial listed Danish companies for the 2002–2010 period. Our results show that a joint audit is associated with higher fees, but that the association between joint audit and abnormal accruals is insignificant. This suggests that the higher audit fees cannot be explained by higher audit quality. Our results are robust to alternative measurements of fee…
Audit quality and the going-concern decision-making process: Spanish evidence
2004
In this study, we attempt empirically to investigate the relationship between audit quality and the probability that a financially distressed company would receive a going-concern opinion. Auditor decision-making in the presence of going-concern uncertainties may be characterized as a two-stage process. The first stage is the identification of a potential going-concern problem and the second stage is to determine whether the particular company should receive a qualified going-concern opinion. A sample of 1,199 non-financial Spanish company-years has been obtained from the database issued by the Stock Exchange National Commission for the fiscal years ending between December 1991 and December…
Are Audit Firms’ Compensation Policies Associated With Audit Quality?
2020
We examine how compensation policies of audit firms are associated with audit quality. Specifically, we investigate the effects of the ratio of variable to fixed compensation and the size of the basis for profit sharing (i.e., whether partners share profits in a small or in a large profit pool). For our analyses, we use detailed mandatory disclosure of the compensation policies in German audit firms. We document that compensation policies vary considerably across audit firms. We find that profit sharing in a small profit pool and high variable compensation are two characteristics of auditor compensation associated with lower audit quality. We also find some evidence suggesting that audit qu…
Audit fees and earnings management: differences based on the type of audit
2020
In spite of the extensive research about the impact of audit fees on audit quality, there is no research examining if the association between voluntary audits and audit pricing affects audit quality. Therefore, the aim of this paper is to empirically examine whether the effect of audit fees on audit quality, measured by the level of earnings management, is affected by the type of audit (voluntary vs mandatory), as well as whether the effect of audit fees on audit quality is different depending on the type of audit. Using a sample of Spanish SMEs composed of both voluntarily and mandatorily audited companies, we find that voluntary audits have higher quality when audit fees are lower, but th…
Internal Quality Assurance for Higher Education Study Programme
2015
<p>Quality assurance for study programme is necessary precondition to realize qualitative higher education. Quality assessment is important part of quality assurance cycle. There are used different methodologies, assessment criteria and indicators to assess the higher education quality. It is clear that the assessment results which study programme will be better or worse are detected by the choice of criteria. It is difficult to find objective criteria which could be used universally for all study programme types. The aim of the research is to investigate quality assurance cycle for study programme quality and pay main attention to assessment part. The aim of assessment part is to sel…
ISO 9000‐based quality assurance approaches and their relationship with strategic analysis
2003
Many organisations use the ISO 9000 series as a reference framework to establish their quality assurance system. In doing so, most of them overlook the process of interpreting and adapting these standards to their own characteristics and capabilities. As a result, there is a misunderstanding with respect to the objectives of the standards. The correct implementation of the ISO 9000 series requires a preliminary analysis that facilitates the adaptation of them to the particular circumstances of a company. Therefore, this paper pays attention to the relationship existing between ISO 9000 implementation and the use of strategic diagnosis tools. The employment of such tools could be studied as …
Audit Quality and Corporate Governance: Evidence from the Microfinance Industry
2012
This study uses a unique, hand-collected sample of microfinance institutions from 73 countries that typically are not investigated in accounting research to analyze the relationships between audit quality and governance mechanisms. We examine two measures of audit quality, namely, the use of Big Four auditors and the presence of internal auditors who report to the boards of these institutions. The empirical analysis of this study reveals that these two quality metrics are highly related, although we also demonstrate that these metrics capture distinctive aspects of audit quality. In particular, the presence of internal auditors is related to other indicators of stricter governance, whereas …
Audit Committee Independence and Auditor-Manager Disputes
2020
This paper analyzes the role of audit committee independence in resolving disagreements between management and the auditor regarding financial reporting. The common intuition suggests that the audit committee must be independent from management to be able to support the auditor against the manager's manipulation attempts. We build a one-period strategic model to show that this intuition is valid only if overinvestment is a bigger concern to shareholders than underinvestment. Otherwise, any audit committee will agree with management to avoid underinvestment. The audit committee's optimal independence level, which can be fully independent or partially dependent, is affected by investment effi…