The Effects of the Internal Control Opinion and Use of Audit Data Analytics on Perceptions of Audit Quality, Assurance, and Auditor Negligence

2017 ◽  
Author(s):  
Dereck Barr-Pulliam ◽  
Helen L. Brown-Liburd ◽  
Kerri Ann Sanderson
Keyword(s):  
Quality Assurance ◽  
Internal Control ◽  
Data Analytics ◽  
Audit Quality ◽  
Audit Data

The Effects of the Internal Control Opinion and Use of Audit Data Analytics on Perceptions of Audit Quality, Assurance, and Auditor Negligence

2021 ◽  
Author(s):  
Dereck Barr-Pulliam ◽  
Helen L Brown-Liburd ◽  
Kerri-Ann Sanderson
Keyword(s):  
Quality Assurance ◽  
Internal Control ◽  
Data Analytics ◽  
Audit Quality ◽  
Financial Statements ◽  
Entire Population ◽  
Statistical Sampling ◽  
Testing Methods ◽  
Audit Failure ◽  
Audit Data

Audit data analytics (ADAs) allow auditors to analyze the entire population of transactions which has measurable benefits for audit quality. However, auditors caution that the level of assurance on the financial statements is not incrementally increased. We examine whether the testing methodology and the type of ICFR opinion issued affect jurors' perceptions of auditor negligence. We predict and find that when auditors issue an unqualified ICFR opinion, jurors make higher negligence assessments when auditors employ statistical sampling than when they employ ADAs. Further, when auditors issue an adverse ICFR opinion, jurors attribute less blame to auditors and more blame to the investor for an audit failure. Additionally, jurors perceive the use of ADAs as an indicator of higher audit quality and are less likely to find auditors negligent. However, jurors do not perceive a difference in the level of assurance provided when auditors use ADAs versus sampling testing methods.

Audit Quality and Internal Control Weakness: Evidence from SOX 404 Disclosures

2012 ◽  
Author(s):  
Yangyang Chen ◽  
Ferdinand A. Gul ◽  
Cameron Truong ◽  
Madhu Veeraraghavan
Keyword(s):  
Internal Control ◽  
Audit Quality

scholarly journals The Influence of Auditor Professionalism and Auditor's Competency on Audit Quality

2020 ◽  
Vol 4 (3) ◽  
pp. 460-464
Author(s):  
Widyanah Widyanah
Keyword(s):  
Data Collection ◽  
Direct Observation ◽  
Internal Control ◽  
Audit Quality ◽  
Control Unit ◽  
Quantitative Approach ◽  
Primary Data ◽  
Savings And Loans ◽  
Verification Method ◽  
Descriptive Method

This research was carried out on Nasari Savings and Loans (KSP). The main objective of this research is to find out the influence of professionalism and auditor competence on audit quality on KSP Nasari. The method used in this research is descriptive method and verification method using a quantitative approach. The data used in this study is primary data. Data collection is done by direct observation, interviews, questionnaires and literature which is done by reading and studying books related to the problem. The population used for this study was 40 people, they consisted of Internal Control Unit (SPI) on KSP Nasari. The results of this study are professionalism and auditor competence positively and significantly affect audit quality.           

Big data and data analytics in auditing: in search of legitimacy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Federica De Santis ◽  
Giuseppe D’Onza
Keyword(s):  
Big Data ◽  
Data Analytics ◽  
Audit Quality ◽  
Empirical Studies ◽  
Innovation Process ◽  
Structured Interviews ◽  
Senior Managers ◽  
Content Type ◽  
Audit Strategy ◽  
Audit Standards

Purpose This study aims to analyze the utilization of big data and data analytics (BDA) in financial auditing, focusing on the process of producing legitimacy around these techniques, the factors fostering or hindering such process and the action auditors take to legitimate BDA inside and outside the audit community. Design/methodology/approach The analysis bases on semi-structured interviews with partners and senior managers of Italian audit companies. Findings The BDA’s legitimation process is more advanced in the audit professional environment than outside the audit community. The Big Four lead the BDA-driven audit innovation process and BDA is used to complement traditional audit procedures. Outside the audit community, the digital maturity of audit clients, the lack of audit standards and the audit oversight authority’s negative view prevent the full legitimation of BDA. Practical implications This research highlights factors influencing the utilization of BDA to enhance audit quality. The results can, thus, be used to enhance the audit strategy and to innovate audit practices by using BDA as a source of adequate audit evidence. Audit regulators and standards setters can also use the results to revise the current auditing standards and guidance. Originality/value This study adds to the literature on digital transformation in auditing by analyzing the legitimation process of a new audit technique. The paper answers the call for more empirical studies on the utilization of BDA in financial auditing by analyzing the application of such techniques in an unexplored operational setting in which auditees are mainly medium-sized enterprises and family-run businesses.

The Impact of Management Alumni Affiliation and Persuasion Tactics on Auditors' Internal Control Judgments

2017 ◽  
Vol 93 (2) ◽  
pp. 97-115 ◽  
Author(s):  
Sudip Bhattacharjee ◽  
J. Owen Brown
Keyword(s):  
Internal Control ◽  
Social Identity Theory ◽  
Audit Quality ◽  
Revolving Door ◽  
Auditor Judgment ◽  
Professional Skepticism ◽  
Sarbanes Oxley ◽  
External Auditor ◽  
One Year ◽  
The Impact

ABSTRACT Concerns over “revolving door” practices of companies hiring directly from their external auditor led to a Sarbanes-Oxley Act provision mandating a one-year cooling-off period before such hires can occur. Yet little is known as to whether these alumni affiliations, still prevalent today, actually impair audit quality. Drawing on Social Identity Theory, we conduct an experiment to examine whether auditors experience heightened identification with an alumni-affiliated client manager and, if so, how this perceived relationship affects their professional skepticism in response to a management persuasion attempt. As predicted, absent the use of a management persuasion tactic, auditors identify more with an alumni-affiliated manager than a non-alumnus with equal professional experience, and this perceived social bond enhances the manager's influence. However, the use of a common persuasion tactic, while effective at influencing auditor judgment when used by an unaffiliated manager, “backfires” when used by an alumni-affiliated manager, leading to diminished persuasion and increased professional skepticism. Evidence suggests that auditors are better able to identify the inappropriateness of the persuasion attempt when the tactic is used by an alumni-affiliated manager.

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