Research in Auditing

7/24/2019 Research in Auditing

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Research in Auditing:

Auditor IndependenceDamai Nasution, Dr. Sc. (Acc.),

Ak. CA.


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Introduction

What is the raison d!tre o" theaudit market#$%ecti&e ' ecient aocation o" *uman capita

resources

Stakehoders Auditingpro"ession

Audit demand Audit supp+

Audit market


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Introduction

What is the auditing research# Wh+ is it interesting#

*istor+ o" auditing

he important roe o" auditing e-took:

Impro&e the reiaiit+ o" the /nancia statements Contriute to the e%ecti&eness o" the capita markets

Research iterature:

he in"ormation h+pothesishe monitoring h+pothesishe insurance h+pothesis

0erspecti&es empo+ed


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Introduction

Approaches appied

opics1issues

op 2ournas dedicated

Internationa "orums.


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Current Issues

Issues: 0uic o&ersight

he most ecient and e%ecti&e mechanism o" puic o&ersight Impact o" a such mechanism on auditors eha&iour as 3e as economics

conse4uences

Audit market concentration

*o3 the concentration a%ects to cients choices, audit pricing, auditorseha&iour, etc.

Auditor independence 5actors that can 2eopardise and protect auditor independence

Auditor tenure he conse4uences o" auditor tenure on auditor independence, audit 4uait+,

audit "ees

Audit 4uait+ 5actors that a%ect audit 4uait+ he economic conse4uences o" audit 4uait+ Chickens or eggs# Instruments to measure audit 4uait+ he roe o" audit committee

Audit /rm o3nership structure


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Current Issues

Audit /rm operating structures Audit /rm go&ernance

audit /rm go&ernance, auditor eha&ior and roe o" transparenc+

Audit and NAS "ees he impact o" economic dependence on auditor independence

Auditing e-pectation he puic e-pectation o" audit roes

Audit risk assessment 5actors considered + auditor Audit risk assessment and audit 4uait+

Audit reguation Auditor iaiit+ Industr+ speciaisation Auditor reputation 6ig 7 &s. Non8 6ig 7 (product di%erentiation

h+pothesis1reputation rationae h+pothesis)


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Current Issues

Industr+ speciaisation: Impacts on audit 4uait+

Audit "ees

Auditor reputation Impacts on audit 4uait+

Auditor eha&iour

6ig 7 &s. Non8 6ig 7 (product di%erentiationh+pothesis1reputation rationae h+pothesis)

Auditor 2udgment ' decision making

Corporate go&ernance and auditing

9itigation risk and auditor eha&iour


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Introduction

rend in the ana+sis:reating the 6ig87 not in a homogeneous

3a+ (ook at 5igure )

Considering the poitica dimension1egaregime

esting the puic companies

phenomena on pri&ate companies Auditor industr+ speciaisation

$; and China phenomena


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Big 4

Individual Big 4 frm

Big 4 city oce

Big 4 city oce

partner

Individual auditor

Figure 1: Treatment o Big 4


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Research in Auditing: AuditorIndependence

Audit 4uait+ and auditorindependence

he audit 4uait+ is a 2oint proaiit+that an auditor 3i both (a) discovera breach in the client's accountings+stem, and () report the reach

(DeAngeo,


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Audit Quality


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A cornerstone o" the auditingpro"ession.

he pro"ession promotes it to de/ne,de"end, and e-tend the pro"ession(Sikka ' Wimott,


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Independence in mind is de/ned as the state o"mind that permits the e-pression o" a concusion3ithout eing a%ected + in?uences thatcompromise pro"essiona 2udgment, there+ao3ing an indi&idua to act 3ith integrit+ and

e-ercise o2ecti&it+ and pro"essiona scepticism(I5ACs).

Independence in appearance is de/ned as thea&oidance o" "acts and circumstances that are sosigni/cant that a reasonae and in"ormed third

part+ 3oud e ike+ to concude, 3eighing a thespeci/c "acts and circumstances, that a /rms, or amemer o" the audit teams, integrit+, o2ecti&it+ orpro"essiona scepticism has een compromised(I5ACs).


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Independence in "act as a characteristic o"the indi&idua auditor in 3hich auditors 3ie uniased 3hen conducting the auditing

assignment, "rom the panning phase throughto the reporting phase (6arett,


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Independence is @the aiit+ o" auditors toresist management pressure (Bnapp, ).

Independence is de/ned as the @aiit+ toact 3ith integrit+ and o2ecti&it+ in

per"orming the audit (EcBine+, 0an+, andReckners (). 6artett (


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What is auditorindependence#

Documents

Research in Auditing