Quality in Independent Auditing:A Research on Auditors

The aim of this study is to determine the opinion related to the audit quality of independent auditors in Turkey.For this purpose,a study was carried out on the auditors operating in the TRC 1 region and having an auditor certificate.Questionnaire method was used in the research.In the evaluation of the data,frequency,mean,and standard deviation were used as descriptive statistical methods.In addition,t-test and one-way ANOVA test were used to compare the data between independent groups.Research results show no significant difference between the opinions of the independent auditors according to various variables.

Extemal Quality Control and its Impacts on Quality in Auditing Companies With Focus on Small and Medium-sized Audit Companies

After numerous spectacular balance scandals in the United States and Europe, an international discussion about the quality of audits as well as the necessity to raise the quality of financial audits arose. The United States of America responded to this discussion with the ＂Sarbanes-Oxley Act＂, while the European Union decreed the directive 2006/43/EC. The mentioned directive updated the statutory provisions for the professional guild of auditors to increase the quality of audits. In detail, it demanded an external quality-control-system combined with public supervision for the profession of auditors to ensure a better quality. Due to this fact, the audit companies now have to fulfill a large range of requirements to provide evidence of their consistent auditing-quality and furthermore of the quality standards within their company. Since many small and medium-sized companies are not able to fulfill these new requirements, the number of small and medium-sized audit companies decreases noticeably. This paper discusses the research results on the effects of external quality control^given by law---on the auditor market in Germany focusing on small and medium-sized audit companies. Additionally the research examines that, if the external quality control, which was one of the justifications of the conversions of the EU-directive 2006/43/EC is able to increase the quality in audit companies at all. Therefore it needs to be tested whether there is a uniform and fits all approach of quality in audits. The research questions and the tests were analyzed scientifically and confirmed in several expert interviews with four different expert groups in Germany.

Audit Quality in Practice A Critical Analysis of the Financial Reporting Council （FRC） Discussion Paper

The efforts by the Financial Reporting Council （FRC） in the United Kingdom （UK） to stimulate audit firms to improve audit quality manifest in its Discussion Paper： Promoting Audit Quality warrant further analysis. The discussion paper identified factors such as audit firm culture, the quality of people, the effectiveness of audit process, and outside factors such as management and audit committee （AC） which can affect level of audit quality in practice. Reporting upon the analysis of responses to the discussion paper, the objective of this study is to analyze views from the respondents about various issues related to audit quality. This study composes of how subject of audit quality is seen in practice, which contributes to our understanding of conditions, events, or processes that can affect audit quality in practice.

Audit Quality, Legal Systems, Investment Opportunity Set and Ownership Structure： Evidence From United States, France and Germany

This paper investigates the determinants of audit quality of three countries especially the United States, France and Germany belonging to three different legal systems. These determinants concern the legal system of country, investment opportunity set and ownership structure which have influence of audit quality.Empirical results show, initially, that specificities of legal system are positively associated with audit quality appreciated by size of audit firm. Then, the results reveal that investment opportunity set influences partially size of audit firm. Finally, ownership structure influences negatively the search for a high audit quality

Toward the Effect of Audit Quality on Earnings Management——Empirical Evidence from Manufacturing Enterprises Listed in Shanghai Stock Market

Nowadays, earnings management is a hot issue, but most of the researches focus on the incentives of earnings management and few of them refer to the effect of audit quality on earnings management. In this study, we directly examine the effect of external audit quality on earnings management by using discretionary accruals. We find that the discretionary accruals of non-dual audit companies are significantly greater than those of dual audit companies. We also find that clients of non-First Ten auditors intend to report greater discretionary accruals than those of First Ten auditors.

Measuring Audit Firms＇ Intellectual Capital as a Determinant of Audit Quality： A Suggested Model

The intellectual capital is a main source of competing advantage. Many studies developed measure（s） of intellectual capital of industrial and service firms. Few studies have tried to develop a reliable measure of intellectual capital in audit firms. This study extends the current models to provide more insight into the role of intellectual capital in audit firms. The aim of this study is to develop a quantitative model to measure audit firms＇ intellectual capital. The suggested model can be used to explore the relationship between the intellectual capital in audit firms and audit quality. The model combines the main components of intellectual capital （human capital, structural capital, and relational capital）. The suggested model provides a tool that may help to better manage the intellectual capital in audit firms. As this is a theoretical study, a number of hypotheses are presented for testing in the future.

Perceptions on the Effects of Auditor-Client Relationship upon Audit Quality and Auditor Independence： Evidence from Bahrain

The study aims to focus upon the association between the auditors and companies by indicating how this association affects the quality of audit and auditor independence in a developing country （the case of Bahrain）. To achieve these objectives, a questionnaire was developed and distributed to respondents from audit firms in Bahrain. Descriptive statistics were used to analyse the influence of auditor-client association upon quality of audit and auditor independence and how audit quality and auditor independence are improved was also explored in the study. The results show that all the questions （1-8） in the questionnaire impair both audit quality and auditor independence with the means ranging from 3.6000 to 4.0364 with an average mean of 3.7212. According to the measurement scale, any item with a mean of 3.50 or more is acceptable, and since all the influences are above 3.50, they are all acceptable. Regarding how auditor-client relationship （or long tenured auditor） would improve both quality of audit and auditor independence, the results show that all the questions （9-17） would improve both audit quality and auditor independence with the means ranging from 3.6364 to 4.0727 with an average of 3.8646, which are acceptable. These results confirm statistically that there is a significant relationship between the auditor long-term tenure and audit quality and auditor independence, so the null hypothesis （H0） is rejected and the alternative hypothesis is accepted. Simple regression analysis is employed to test the hypothesis of the study and its significance. The results show that （H0） hypothesis is not significant. Therefore, the alternative hypothesis （H1） is significant at p 〈 0.005, which means that there are differences in viewpoints among respondents and the p-value obtained is 0.044 which is less than the significant value of p 〈 0.05. These results confirm the hypothesis that a significant relationship exists between the auditor long-term tenure and quality of audit and auditor independence.

Audit Quality in Kazakhstan： Does Big 4 Provide High-Quality Audits？

This paper provides empirical evidence on audit quality in Kazakhstan as measured by audit tenure and the frequency of issuing modified opinions. In addition, an overview of audit institutions of Kazakhstan and an analysis of the current audit market for public companies are offered. This paper also sheds light upon the potential independence problems resulting in low audit quality and current barriers to audit researches in Kazakhstan. Consistent with the findings of extant researches on audit quality and the general perceptions of investors, two hypotheses were developed, i.e., the audits performed by Big 4 audit firms in Kazakhstan also have higher quality than non-Big 4 audit firms in terms of audit tenure and the frequency of issuing modified opinions. The result confirms the hypothesis that Big 4 audit firms provide higher audit quality than smaller local firms in association with audit tenure instead of in relation to the frequency of issuing modified opinions. The result indicates that Big 4 audit firms may not be as independent as they will be in a highly litigious market. Therefore, an independent inspection should be regularly implemented according to the audit law, and the inspection report should be publicized by Chamber of Auditors （COA）1. If this is not practical due to the lack of qualified inspectors, a peer review may be an altemative to implement the quality control policy immediately. To the author＇s best knowledge, this is the first audit quality research in countries of the Commonwealth of Independence States （CIS）.

The Effect of the Board of Directors and Audit Quality on Disclosure of Internal Control Practices: Evidence from European Companies

The purpose of this paper is to examine the effect of the board of directors,namely board size,board independence,and CEO duality,as well as audit quality on the disclosure of internal control information.The sample consists of 164 European companies listed in the STOXX Europe 600.Based on positive agency theory,the authors posit that board of directors and audit quality influence corporate internal control disclosure practice.The content analysis and the design of the evaluation criterion were used to calculate the disclosure index of internal control.Thus,multiple regression analysis is utilized to analyze the results of this paper.The average internal control information disclosure index was 0.285,indicating that most of the companies in our sample do not disclose enough information about the internal control.This low level of forward-looking information disclosure makes it very difficult for corporate stakeholders to determine the future performance of the company.Multivariate results indicate that internal control disclosure is positively and significantly associated with board independence,CEO duality,and audit quality.This study contributes to the literature on the various governance characteristics and disclosure by showing that the disclosure of internal control information in European countries is positively and significantly associated with board independence,separation of duties,and audit quality.Our study was based on a sample of European companies including countries regulating IC disclosure as well as unregulated settings.As noted by Bedard and Graham(2014),regulatory differences in countries can contribute insights on the costs and benefits of disclosure.Findings also have policy implications for investors,managers,and regulators.

Effects of Mandatory Audit Firm Rotation Upon Quality of Audit： The Perception of Audit Firms Evidence From Bahrain

The objectives of this study are： （1） to explore current audit appointment practices by audit firms in Bahrain; （2） to look into the opinions of audit firms in Bahrain on potential effects provided by implementing mandatory audit firm rotation （audit quality）; and （3） to investigate audit firms＇ views in implementing mandatory audit firm rotation in Bahrain. To achieve these objectives, a questionnaire was developed and distributed to respondents that consist of all auditors working in audit firms in Bahrain. The findings indicated that there is a significant relationship between mandatory audit firm rotation and quality of audit. The study also indicated that longer partner tenure makes the auditor＇s performance lack the quality in the auditing process. The average mean for all questions of the hypothesis together is 2.73 with average standard deviation of 0.94 which is less than half of the mean. This means that there is no dispersion among respondents about the questions of the hypothesis. Also, the analysis shows that the t-value is 29.922, which is greater than the table critical value of t （1.66）, and the p-value obtained is 0.000 which is less than the value of significance at p 〈 0.05. These results confirm statistically that there is a significant relationship, so the null hypothesis is rejected and the alternative hypothesis is accepted.

Board independence, ownership structure, audit quality and income smoothing activities： A study on Malaysian market

The 1997 economic crisis faced by many East Asian economies has generated a substantial amount of debate largely focused on issues such as the roles and functions of good corporate governance （CG）. Lack of transparency has been singled out as the major culprit of the crisis and it has been alleged to cause management to indulge themselves in unhealthy activities such as income smoothing （IS） act. The paper extends Nasuhiyah, Hian, Sob and WEI （1994） by incorporating contextual variables that proxy for CG, ownership structure and audit quality. The empirical analysis is conducted on a sample of Bursa Malaysia listed companies for a period between 1991 and 2000. The main intention of taking this time span is to observe to what extend has previous business operations inculcated the feature of CG in the running of their companies＇ activities despite not being obligatory for them to uphold. The results showed that the existence of non-executive directors and the presence of brand name auditors to be significant in hindering the management from indulging in IS. The study opens the way for a richer understanding of the links among CG, ownership structure, audit quality and IS in Malaysia.

Client importance and audit quality： Evidence from a-shares capital market data of 2002-2005

Using China A-shares capital market data of 2002-2005, this paper supports the conclusion that client importance is negatively associated with audit quality. Further, we partition the sample into Big 4 and Non-Big 4. In subgroup of Non-Big 4, client importance is negatively associated with audit quality statistically. However, this association isn＇t statistically significant in Big 4 subgroup. The conclusion is significant for the development of CPA finns.

The Effect of Audit Objectives on Audit Quality Why is There Little Disclosure of Significant Deficiencies in Japanese Internal Control Audits？

Many prior research findings indicate that audit quality differs between the Big 4 and non-Big 4 audit firms using an indicator variable. However, most previous research focuses on only outcome measures, such as audit fees, going concern reports, and non-audit services. This study investigates audit quality differentiation between the Big 4 and non-Big 4 audit firms hypothesis from an audit objective point of view. One of the material objectives of Japanese internal control audit institutions is to facilitate assessment and improvement of internal controls by corporations themselves. The findings of this study indicate that the Big 4 audit firms accomplish this objective better than non-Big 4 audit firms. Consequently, most Big 4 clients do not disclose significant deficiencies （SDs）, implying that they improve the quality of internal controls through internal controls auditing. This paper concludes that Big 4 firms produce a higher audit quality level than non-Big 4 firms, and this quality difference iS related to how an audit objective is interpreted and implemented.

Audit fees and audit quality

The audit industry in China has developed rapidly in recent years, the formulation of national policy also needs the support of audit industry. The number of accounting firms has been increasing, and the final audit quality in the audit is one of the most concerned by the public. Any product quality and price are equivalent, the higher the cost of investment, the better the quality, the higher the price. The audit process is also the case. This paper is mainly based on the relevant audit fees and audit quality is the summary of the existing research results on the relationship between the two for further exploration, consider the audit pricing regulation and audit industry brand and scale effect, and put forward to improve the audit fees and audit quality relationship advice.

The Influence of Government Regulation on Audit Quality

＂Independent Audit basic norms＂ pointed out independent audit is the CPA entrusted by law, to be conduct an independent review of the accounting statements and related information and issue the audit opinion.＂ In the stock market, an independent audit is an important means to achieve fair presentation of financial statements by SFC-authorized accounting firm to conduct an independent audit of listed companies. In the open accounting services market, the independent audit is the most occupied audit resources, the most important business, and therefore the business is also subject to severe supervision of the SFC. Its value lies in perform forensic of the financial statements information of listed companies, and the higher the quality, the more it can reduce the risk of material misstatement of the financial statements, which is the need to strengthen and improve audit quality. Our independent audit market originated in the 1980s, along with the reform and opening up, China＇s economy is experiencing rapid growth, the demand for high quality audit increasingly enhanced. Audit activities have the nature of external and information asymmetry. External audit refers to it have an impact to investors, government departments and the other public stakeholders. Information asymmetry refers to the information asymmetry between the auditor and the audited entity, but due to the presence of asymmetric information and other reasons, the interests of stakeholders will be hurt by false information Government regulation as a model audit industry control, either in foreign or domestic, have played an irreplaceable role, especially in the socialism of China, plays a leading role. For example, when Enron bankruptcy United States speedly issue SOX in 2002 to strengthen the role of government regulation, effectively preventing the conspiracy of the CPA and the audited entity and improve audit quality. Visiblely, the role of government regulation in the audit market is very important.

The Applic ation of Internal Quality Audit in ADCOP Project

Internal quality audits are a key activity in the quality management ofoil projects.Quality management aims at meeting project quality requirements,coordinatingproject progress,assisting in controlling project costs,and realizing continuousimprovement in project quality management.

Audit Partner Rotation, Audit Quality, and Dynamic Industry Structure

Previous research on the relationship between audit partner tenure and audit quality assumed that auditors conducted auditing works in a stable external environment where the corporate and management behavior was highly predictable. This study uses the joint tenure between audit partners and management to explain audit quality, because corporate directors would consider an appropriate adjustment in the management to deal with a dramatic change in the external environment. First, we examined whether there is a significant association between audit partner tenure and audit quality after the implementation of mandatory audit partner rotation by using the auditor tenure only. We addressed this issue by using a sample of Taiwan Residents companies and found no significant association between audit partner tenure and the magnitude of discretionary accruals （DA）, a common proxy for audit quality. Second, we tested the relationship between audit partner tenure and audit quality under the consideration of industry structure stability. The result exhibits a negative relation between audit partner tenure and audit quality under the control of industry structural stability which is measured by a proxy variable, the joint tenure between audit partner and management. Third, we investigated whether the association does exist between joint tenure of auditors and management and audit quality. We also addressed this issue by using Taiwan Residents data and found a significant association between the joint tenure of auditor and management and the magnitude of DA. Our findings provide evidence that the use of a mandatory rotation rule is an ineffective way to improve audit quality.

Quality of Financial Statements and Tenure of Statement-Related Personnel

This study investigates the association between quality of financial statements and tenure of statement-related personnel. First, we examined whether there is still a significant association between financial statement quality and the tenure of audit partners who are responsible for the quality assurance of financial statements after the implementation of mandatory audit partner rotation. We addressed this issue by using a sample of Taiwan Residents companies, with which no significant association between audit partner tenure and the magnitude of discretionary accruals （DA）, a common proxy for financial statement quality, was found. Second, we investigated whether an association exists between the financial statement quality and the tenure of management who is responsible for the preparation of financial statements. We also addressed this issue by using Taiwan Residents data and found a significant association between management tenure （MT） and the magnitude of DA. Our findings provide evidence that audit partner tenure would neither improve nor deteriorate the quality assurance of a financial statement, when there is a mandatory audit partner rotation after a fixed period of time. Whereas how MT affects financial statement quality after the enactment of the mandatory audit partner rotation is dependent on the management position. Increasing tenure of chief executive officer （CEO） and chief financial officer （CFO） will enhance and hinder financial statement quality respectively. In the end, we found a significant interaction of tenure between auditor and CFO. This result implies that the downward bias of CFO on the financial statement preparation can be mitigated by auditors with increasing tenure.

Does high-quality auditing decrease the use of collateral? Analysis from the perspective of lenders' self-protection

We examine the association between audit quality and the use of collateral in a sample of Chinese firms from 2005 to 2011. Using the full sample, we document a negative relationship between audit quality and the use of collateral that is consistent with lenders' interests. We also show that audit quality and collateral are regarded as alternative means of reducing debt credit risk. Our conclusions are robust after using an auditor-switching test, the Heckman two-stage model and a propensity-score matching model to address endogeneity issues. China's institutional background is also considered. First, we find that in the group of firms in which large shareholders are able to control borrowers' activities, the substitution effects between collateral and audit quality are reduced when the degree of separation between large shareholders' control and ownership is high. Second, these substitution effects are greater when the borrowers' ultimate controller is a state-owned enterprise(SOE) rather than a non-state-owned enterprise(NSOE). Third, the differences in substitution effects between NSOEs and SOEs are smaller in areas with a high marketdevelopment index. We conclude that the substitution effects are smaller in high credit risk firms than in low credit risk firms.

Design and Application of the Automatic Monitoring System for Wastewater Source in Shandong Province

In order to realize real-time online monitoring of the wastewater source enterprises,manage and issue monitoring information,this paper comprehensively uses automatic control,embedded data acquisition and transmission,distributed computing and data processing,geographic information system,etc.to develop automatic monitoring system of the wastewater source in Shandong Province.This system incorporates automatic monitoring information acquisition,transmission and daily work as an organic whole.The system realizes not only the continuous online monitoring of wastewater source enterprise,but also the deep excavation and utilization on monitoring information.It provides scientific and objective basis for energy saving,consumption reduction,carbon emission reduction,total amount control and other environmental management works,and meets the requirements of environmental management and related departments to wastewater source management.