International standards in the provision of audit-related services

This article discusses international standards that establish the procedure for providing audit-related services. The key role in the system of this group of international standards is played by the international standards of assurance engagements, the international standards of review checks, and the international standards of related services recognized and in force in the Russian Federation. Taking into account the provisions of Russian regulatory acts and international standards, the types of audit-related services are defined: services that provide reasonable assurance, services that provide limited confidence, and services that do not provide confidence. The subject of the task, within the framework of related services of the corresponding type, and the main features of the provision of such services are also disclosed.

Board committees and non-financial information assurance services

The objective of this study is to examine the role that the specialized committees, created within the board of directors, and the auditor play in relation to the hiring of a non-financial information assurance service and in relation to the choices of the assurance provider for such non-financial information. Specifically, this study analyses the effect of the independence and specialisation of the audit committee, the existence of a CSR committee, and the reputation of the financial auditor associated with its classification as Big4. The results indicate that those responsible for financial information do not show interest in contracting an assurance service, especially if it is realized by an accountant provider, except that the information is standardised according to the Global Reporting Initiative guidelines and the contracted service is comparable to the financial audit standards, has assurance for a reasonable/high level, and is carried out according to the ISAE3000 standard.

What sustainability assurance services do institutional investors demand and what value do they give them?

Purpose The purpose of this study is to analyse the role played by institutional investors in a firm’s decision to hire sustainability assurance services and to determine the benefits of sustainability assurance for the functioning of the capital market. This analysis is complemented by examining the quality of the sustainability assurance service that institutional investors demand. Design/methodology/approach The authors selected a sample of 1,564 multinational firms from 2002 to 2017. Panel data logit and generalised method of moments (GMM) regressions were estimated to consider decisions about hiring sustainability assurance services or not, and the assurance quality indexes constructed by a checklist based on the academic literature, respectively. Findings Institutional pressures associated with the environmental and social impacts of a firm’s activities lead to the convergence of institutional investor attitudes towards corporate sustainability, so that, regardless of their investment horizon, they promote the hiring of sustainability assurance services by corporate boards, which favours analyst precision and a reduction in the cost of capital. Long-term (LT) institutional investors exert influence through a selection mechanism, whereas short-term (ST) institutional investors exert influence through their presence on the board. Once the company has decided to provide assurance about its sustainability report, both types of institutional investors promote a higher quality of such service, although this is not well valued by the stock market. Research limitations/implications This paper extends research on the monitoring role of institutional investors into the sustainability assurance context. Researchers may benefit from this paper’s findings when they examine the factors that drive the hiring of sustainability assurance services and their characteristics. This paper also shows that sustainability assurance services are a significant weakness due to the lack of standardisation in comparison with financial auditing, which complicates the assessment of their quality by stock market participants, thereby penalising those companies that provide more complete sustainability assurance reports. Practical implications Considering this paper’s findings, it seems advisable that regulators establish a normative framework to standardise sustainability assurance processes. The results can also be used as an orientation for both companies, to design their sustainability disclosure policies and regulators, to improve the running of the capital market. Social implications Sustainability assurance services have a positive effect on the running of the capital market and improve external stakeholder decision-making by providing more reliable information, which, in turn, will favour the implementation of more sustainable actions that contribute to the attainment of sustainable development goals. Originality/value This is one of the first papers to analyse the effect of institutional ownership on a firm’s decision to hire sustainability assurance services and consider the effect of the institutional investors’ investment horizon – LT versus ST – and the channel – selection methods and/or active engagement – used by them to exert their influence. The authors also propose several measures of sustainability assurance quality to demonstrate the relevance of the contents of the assurance statement for the capital market in general and the institutional investors in particular.

The effects of blockchain technology on the accounting and assurance profession in the UAE: an exploratory study

Purpose Blockchain looks to be the next step of technology transformation and would redesign the business landscape. It is expected to have an impact on business methods in the next few years; which add new challenges and complexity to the accounting and assurance profession. This paper aims to analyze the perceptions of accountants and auditors toward the implementation of blockchain technology in the UAE after the government decided to transform 50% of government transactions into the blockchain platform by 2021. Design/methodology/approach A qualitative approach has been used in this study. A semi-structural interview has been conducted with 19 accountants, internal auditors, auditors and risk managers on the potential opportunities and challenges of blockchain technology on accounting and auditing practices in the UAE. Findings The findings show that the blockchain impacts on the accounting profession in terms of recording of transactions, storing evidence and providing a secured environment for conducting business transactions. For the auditors, the results indicate that the blockchain changes their audit process and strategy. The blockchain has great potential to supplement traditional auditing by providing a low-cost and decentralized audit process and automated audit evidence. The accounting of the companies will not be changed but it will be automated with the development of cryptocurrencies and blockchain activities. The blockchain will be developed in assurance services through the awareness and involvement of accounts and auditors. Originality/value The study contributes to the existing literature as follows. First, the research is one of the very few studies that discussed empirically the effect of blockchain on the accounting and assurance profession, which contributes to improved knowledge about the potential of blockchain technology to accounting and assurance services. Second, our research is the first to explore the accountants and financial auditors’ perceptions regarding the potential effect of blockchain technology on their profession in the UAE context after the government decided to transform 50% of government transactions into the blockchain platform by 2021. Third, the research identifies the pending challenges for blockchain and possible factors for its effectiveness.

The perceived impact of the KAM reforms on audit reports, audit quality and auditor work practices: stakeholders’ perspectives

Purpose The purpose of this study is to understand how the new reforms related to key audit matters (KAM) disclosures in Australia may have impacted audit quality by eliciting the perceptions of key stakeholders in the audit and assurance services market. Design/methodology/approach The study uses a qualitative approach and New Institutional Sociology (NIS) to explain how auditors have responded to the KAM reforms. Interviews were conducted with 20 individuals representing identified groups of stakeholders in the market for audit and assurance services in Australia. Findings The study finds there is little consensus between some stakeholder groups on whether the KAM reforms may have improved audit quality, based on the perceptions shared. The findings conveyed that the auditors and regulators, standard setters acknowledge that KAM disclosures are either costly and/or time-consuming to implement. The Big Four auditors indicate these reforms led to changes mainly around internal consultations and independent reviews, whereas the non-Big Four auditors highlighted increased interactions with audit clients. Originality/value This is one of the first studies to examine the perceived post-implementation impacts on audit quality of the KAM reforms (ISA 701) after the initial two years of implementation and how auditors have responded, explored through the lens of institutional logic.