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A theoretical approach to auditor independence and audit quality

Rahman Yakubu, Tracey Williams

Corporate Ownership and Control, Volume: 17, Issue: 2, Pages: 124 - 141

Swansea University Author: Tracey Williams

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DOI (Published version): 10.22495/cocv17i2art11

Abstract

Auditor independence and the quality of audit report is of growing concern to regulators, institutional investors and stakeholders as a series of accounting scandals have undermined the professionalism of auditors. The findings from this study produced an insight of how auditor’s independence improv...

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Published in: Corporate Ownership and Control
ISSN: 1727-9232 1810-3057
Published: Virtus Interpress 2020
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa58928
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Abstract: Auditor independence and the quality of audit report is of growing concern to regulators, institutional investors and stakeholders as a series of accounting scandals have undermined the professionalism of auditors. The findings from this study produced an insight of how auditor’s independence improve audit quality and that abnormal audit fees is as a result of additional effort for auditor to carry out rigorous audit engagement as a result of wider audit scope; that mandatory audit firm rotation will enhance auditor independence, and that audit committee with nonexecutive independence will promote audit quality. The study also finds that in terms of auditor size, smaller audit firms that belong to professional bodies will provide higher audit quality. The main conclusion of this research is that where an auditor is fully independent in carrying out audit engagement with strong resistance to fees pressure will enhance audit quality. This research provides insight into the impact of IFRS adoption on audit fees.
Keywords: Audit Fees, Auditor Tenure, Board Composition, Auditor Size, Non-Audit Services, Audit Quality, IFRS
College: Faculty of Humanities and Social Sciences
Issue: 2
Start Page: 124
End Page: 141

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