Applying a new audit regulation: Reporting Key Audit Matters in Jordan

Purpose – Auditing may be viewed as an arrangement for reducing inefficiencies arising from the fundamental market conflict between a seller who wants as high a price as possible and a buyer who wants to pay as low a price as possible. In more general terms, sellers prefer policies that boost the stock price in the short run whereas buyers would prefer the price to peak when they are ready to sell some time in the future. By framing audited financial reports within this context, the purpose of this paper is to provide some insights regarding both audit institutions and audit regulation. Design/methodology/approach – This paper relies on conceptual arguments and a simple analytical model. Findings – The basic findings are that a unique definition of audit quality is not compatible with the economics of a market where there are conflicts across traders as well a possibility that some traders hold superior information to others. Even an identification of quality with accuracy fails in this setting of conflict. The inference is that audit quality should be approached from a multi-dimensional perspective rather than a unique measure. Research limitations/implications – While the paper points out difficulties in constructing measures of audit quality extant in the literature, it does not provide any clear empirical suggestions for better measures. Originality/value – The paper brings back into focus issues from information economics that form the bedrock for the study of audited financial statements in equity markets. While the paper is partially a survey and synthesis of some of the latest empirical findings, it describes them within the context of a rational economic market where traders may possess private information. Within such a market, the paper outlines both the conflicts and the benefits inherent to the current institutional arrangements where auditors are paid by incumbent shareholders and overseen by regulators.

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INTERNAL AUDIT IN UKRAINE: EVOLUTION, PROBLEM ASPECTS AND DEVELOPMENT PROSPECTS

Market Infrastructure ◽

10.32843/infrastruct55-30 ◽

2021 ◽

Author(s):

Ievgeniia Gavrylychenko ◽

Olena Andrenko

Keyword(s):

Organizational Support ◽

Professional Training ◽

Internal Audit ◽

Legal Framework ◽

Regulatory Requirements ◽

Global Trends ◽

Internal Auditors ◽

Current State ◽

Audit Regulation ◽

History Of

The purpose of the article is to summarize the views on the current state of internal audit in Ukraine and identify general promising areas for its development. The evolution, current state and prospects of internal audit development in Ukraine are revealed. The history of internal audit is covered, the stages of development of internal audit in the world and in Ukraine are considered. It is determined that the development of internal audit in Ukraine takes place with the adoption of relevant legislation governing its implementation in a particular area. The current state of internal audit in Ukraine is characterized, the current legal framework for internal audit is analyzed. The level of legislative regulation of internal audit of enterprises of various spheres of activity is revealed. It was found that the establishment of an internal audit function at the legislative level is not mandatory for the private sector, while such companies have all the necessary legal framework that can be used in the process of implementing and conducting internal audit. Views on modern problematic aspects of internal audit development in Ukraine are generalized. It is determined that the most acute issues hindering the implementation of internal audit in enterprises are the lack of methodological and organizational support for internal audit, the low level of development of corporate governance culture, as well as the lack of qualified internal auditors. The actual directions of further improvement of the process of introduction of internal audit in the practice of domestic enterprises are formulated. The necessity of further improvement of normative-legal provision of internal audit regulation, development of methodical recommendations on organizational-technological schemes and procedures of internal audit and improvement of the system of professional training of specialists in internal audit is substantiated. It is concluded that the development of internal audit in Ukraine at the present stage is due to the need to understand internal audit as a potential tool to improve the efficiency of the enterprise, as well as the existing regulatory requirements. Prospects for the development of internal audit in Ukraine must have all the prerequisites to meet modern global trends.

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Contemporary Audit Regulation – Going Global!

Handbook of Key Global Financial Markets, Institutions, and Infrastructure ◽

10.1016/b978-0-12-397873-8.00050-5 ◽

2013 ◽

pp. 333-343 ◽

Cited By ~ 5

Author(s):

C. Humphrey ◽

A. Loft

Keyword(s):

Audit Regulation

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Audit regulation in Germany

Auditing, Trust and Governance ◽

10.4324/9780203936016.ch6 ◽

2008 ◽

pp. 111-143 ◽

Cited By ~ 1

Author(s):

Reiner Quick ◽

Kai-Uwe Marten ◽

Annette K√∂hler ◽

Klaus Ruhnke

Keyword(s):

Audit Regulation

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Lobbying on audit regulation at IAASB

Revista Contabilidade & Finanças ◽

10.1590/1808-057x201804330 ◽

2018 ◽

Vol 29 (77) ◽

pp. 246-265 ◽

Cited By ~ 1

Author(s):

Thiago Macedo Pereira de Matos ◽

Odilanei Morais dos Santos ◽

Adriano Rodrigues ◽

Rodrigo de Oliveira Leite

Keyword(s):

Interest Groups ◽

Public Consultation ◽

Decision Making Process ◽

Point Scale ◽

Specific Group ◽

The Public ◽

Binary Approach ◽

Chi Squared ◽

Audit Regulation ◽

Comment Letters

ABSTRACT The main goal of the paper is to analyze whether the positions of auditors and regulators, and their respective coalitions, regarding the proposals of the International Auditing and Assurance Standards Board (IAASB) in the last phase of the public consultation “Improving the Auditor’s Report” are significantly different, as well as the effectiveness of a lobbying strategy using comment letters. The relevance of this research lies in providing evidence on whether or not the IAASB is influenced by the lobbying strategies of different interest groups carried out via comment letters, especially auditors and regulators (both individually and in coalitions). The results show that both auditors and regulators attempeted to influence the IAASB’s decision-making process, with their coalitions taking a different position on some questions. However, none of these interest groups predominated in terms of the effectiveness of the lobbying carried out, hence the results are consistent with institutional theory, in that the IAASB seeks legitimacy in its actions and tries to accommodate several different interests, but does not let itself be captured by any specific group. We analyzed and classified the comments (from a total of 86 letters) to nine questions proposed by the IAASB into a five-point Likert scale. This classification was independently cross-validated by a second researcher. We applied ANOVA tests to analyze the position of the interest groups, and chi- squared tests for the position of their coalitions. This paper addresses lobbying within the process of auditing standards settings, thus expanding the current literature on lobbying in accounting, which is mainly restricted to accounting regulations. It also contributes methodologically by using a new five-point scale for the dependent variable instead of the usual binary approach.

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An account of accountants: Audit regulation and the audit profession in Denmark

Auditing, Trust and Governance ◽

10.4324/9780203936016-10 ◽

2007 ◽

pp. 60-95

Keyword(s):

Audit Regulation

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The Effects of Client Identity Strength and Professional Identity Salience on Auditor Judgments

The Accounting Review ◽

10.2308/accr-50863 ◽

2014 ◽

Vol 90 (1) ◽

pp. 95-114 ◽

Cited By ~ 76

Author(s):

Tim D. Bauer

Keyword(s):

Professional Identity ◽

Social Identity Theory ◽

Cost Effective ◽

Auditor Independence ◽

Identity Salience ◽

Professional Skepticism ◽

Auditor Tenure ◽

Auditor Judgments ◽

Audit Regulation ◽

Cost Effective Alternative

ABSTRACT Considerable recent audit regulation, both proposed and mandated, and accounting research has focused on auditor independence threats arising over long auditor tenure. Psychology research, however, suggests independence threats also likely arise when auditor tenure is short because auditors can quickly develop a strong client identity, raising questions about the effectiveness of mandatory audit partner or firm rotation to address independence concerns. Relying on Social Identity Theory, I examine mechanisms for promoting auditor independence that can be implemented regardless of auditor tenure or rotation. I conduct two experiments in a setting with no prior auditor-client history. As predicted, auditors who identify more strongly with their clients, by sharing their values, agree more with the client's preferred accounting treatment, unless the salience or arousal of their professional identity is heightened. Further, as predicted, heightening professional identity salience increases professional skepticism. My results provide an improved understanding of the joint effects of identity strength and salience on auditor judgments and suggest a cost-effective alternative to auditor rotation to maintain auditor independence, even when auditor tenure is short.

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