International Journal of Auditing最新文献

The aim of this article is to describe and explain how developments from the 1980s to 2024 have changed the nature of audit regulation. To this end, the article draws on central concepts from regulatory literature. The Swedish case is used as an example, with a historical review based on data from parliamentary documents and articles published in the Swedish trade magazine Balans. The empirical findings show that the regulatory developments since the 1980s can be divided into three different eras, each spanning 15 years. The first era is characterised by professional self-regulation supplemented by some conventional regulation. The second era is marked by meta-regulation following Sweden's membership in the EU. In the third era, self-regulation is largely replaced by alternative regulatory approaches. The conclusion is that parallel regulatory approaches coexist and shape various forms of regulation and that regulative change can be explained by institutional developments, internationalisation and normative expectations.

We study the association between non-audit services (NAS) and the potential economic benefit to audit clients of higher investment efficiency. Little prior research has examined whether NAS produces measurable benefits or simply additional costs for clients procuring them. We contribute to this sparse literature by examining whether the level of NAS is associated with firm-wide investment efficiency. Our findings indicate that increased NAS fees are generally negatively associated with investment efficiency, with this association being stronger for smaller audit clients and primarily driven by the audit-related component of NAS. However, we also find that the negative NAS association with investment efficiency is significantly reduced when the NAS is obtained from high-quality auditors. These findings suggest that not all NAS is alike and that different benefits can accrue when clients obtain NAS from high-quality auditors. Therefore, when assessing NAS in other contexts, as well as the economic benefits of NAS, it is important to determine whether the NAS is obtained from high-quality or non-high-quality auditors. Our findings should be of interest to audit clients and their audit committees as they make decisions about purchasing NAS, as well as to audit practitioners and regulators, given that the provision of NAS remains controversial, and the economic benefit to clients appears nuanced.

The study of the potential relationships between employee turnover and organizational performance has been important for researchers, practitioners and audit regulators. However, limited evidence exists regarding the association between staff turnover and organizational performance in professional accounting firms. The present study aims to fill this gap in the literature by using a unique hand-collected dataset from Korea. We find that the collective turnover rate of professional staff is negatively associated with public accounting firms' profitability and productivity. When considering the turnover rates of partners and senior certified public accountants (CPAs) separately, we observe that although both partner and senior CPA turnover are negatively associated with profitability and productivity, partner turnover is more strongly associated with these outcomes. Additionally, we find that audit partner turnover is associated with an increase in the percentage of auditing enforcements and a decrease in the audit client retention rate, which may reflect challenges in maintaining audit quality and audit client relations at the accounting firm level. We further find that the negative associations of professional staff turnover with profitability and productivity are less pronounced for Big 4 accounting firms, but the negative association with audit client retention is more pronounced for these firms. Overall, the results suggest that, although turnover is negatively associated with the organization-level outcomes of public accounting firms, the turnover–performance relationship depends on moderators such as job level and organization size.

Disclosures of audit firm tenure have been mandated in some countries and are being considered in others. We investigate whether and how the form of firm tenure disclosures and the inclusion of partner tenure combine to affect investor judgements. We find that investors perceive the auditor as more independent and their investment as more attractive when firm tenure is disclosed in brief rather than detailed form, and this effect is stronger when partner tenure is disclosed along with firm tenure than when it is not. A mediation analysis shows that perceived auditor independence explains the joint effect of firm tenure disclosure form and partner tenure disclosures on the investment judgement. Audit regulators should consider our findings when assessing whether and how auditor tenure disclosures should be mandated and whether it is beneficial to standardize disclosures.

This paper adds to prior literature by examining whether requiring the assurance of non-financial information increases audit fees. Specifically, we use a sample of New Zealand not-for-profits (charities) newly required to prepare statements of service performance (SSP), following accounting standards and assured per auditing standards. We find evidence of a significant increase in audit fees, although there is no change in audit or filing lag. There is some evidence that adopting the New Zealand-specific auditing standard for SSPs can reduce the increase in audit fees for smaller not-for-profits. Overall, our results suggest mandating non-financial information should be viewed as having increased costs. These results are particularly salient considering the ever-increasing push for non-financial and sustainability information throughout the world.

We analyse how the introduction of mandatory audits of sustainability reports conducted by the auditor of the financial report changes audit effort and quality choices. In our model, the auditor decides on effort allocation between a financial audit and a sustainability audit. Our analysis reveals that, in a competitive market, legislators may not consistently drive higher financial (sustainability) audit efforts solely through increased litigation payments for financial (sustainability) audit errors. Based on the cost structure, there exists either a substitutive effect or a complementary effect; that is, increasing litigation for errors in the financial audit increases the financial audit effort while simultaneously increasing or decreasing the sustainability audit effort and vice versa. In both scenarios, an overall improvement in audit quality is observed with increased litigation. We extend our analysis to a two-provider setting, where the above results hold structurally under some conditions. The overall audit quality can be higher or lower than in the one-provider setting. These findings represent novel insights not previously explored in the existing literature.