Audit quality and independence concerns after major audit reforms within a developing country: stakeholder perceptions from Vietnam

Nguyen, Lan Anh; Kend, Michael; Luong, Hoa

doi:10.1108/maj-03-2022-3475

Cited by 4 publications

(6 citation statements)

References 62 publications

(141 reference statements)

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“…This leads to restrictions by institutions on human actors and the context within which they operate (Kend and Nguyen, 2022). These institutional rules must be reformed and transformed to maintain the relevance of the Vietnamese audit profession during the rapid advancement of audit technologies (Nguyen et al, 2023a(Nguyen et al, , 2023b. Apart from reforming audit rules, we arrive at a similar conclusion to Liew et al (2022) that overall, these changes imply that accounting graduates entering the audit profession must arrive with stronger digital aptitude.…”

Section: How Digital Transformation Impacts Vietnamese Auditors' Work...mentioning

confidence: 77%

“…Issa et al (2016) argued that there is a change in the role of accountants as now accountants must be tech-savvy to perform the jobs of the future. The accounting profession may be replaced by automated tools because of the existence of accounting software that supports the work of accountants, as these make accountants' professional activities easier, but they may reduce the need for PAR 36,1 humans (Nguyen et al, 2023a(Nguyen et al, , 2023b. So many people worry that accounting profession is no longer needed by the business world in the big data era as humans are being replaced by more accounting software, which is cheaper, faster and more accurate in recording financial transactions.…”

Section: Prior Literaturementioning

confidence: 99%

“…This can increase the cost of the audit or omit important information, affecting the audit conclusion. Local Vietnamese audit firms struggle with controlling costs, particularly since the COVID-19 pandemic, when cost cutting was reported by studies such as Nguyen et al (2023b) to retain audit clients. The final audit opinion greatly depends on the subjective judgement of the auditor; it can be said that professional judgement is paramount:…”

Section: Will Audit Professionals In Vietnam Be Replaced By Audit Tec...mentioning

confidence: 99%

“…The quality of audit services is a concern for regulators in Vietnam, and external audit is currently undergoing major reforms in Vietnam, which started around 2014 (Nguyen et al, 2020). This has led to strict laws related to the provision of audit and assurance services, although there is evidence of noncompliance in the extant literature (Nguyen and Kend, 2019;Nguyen et al, 2020;Nguyen et al, 2023b).…”

Section: Introductionmentioning

confidence: 99%

“…This has led to strict laws related to the provision of audit and assurance services, although there is evidence of noncompliance in the extant literature (Nguyen and Kend, 2019; Nguyen et al. , 2020; Nguyen et al. , 2023b).…”

Section: Introductionmentioning

confidence: 99%

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Digital transformation in Vietnam: the impacts on external auditors and their practices

Nguyen,

Kend,

2024

PAR

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Purpose This study aims to explore some perceptions related to the suggestion that external auditors will be replaced by audit technologies that use artificial intelligence (AI) tools to make audit judgements when performing the financial statement audits. Digital transformation is revitalising the technologies used by external auditors and their firms; thus, the authors seek to understand what challenges this creates for the auditing profession in Vietnam. Design/methodology/approach Through the theoretical lens of new institutionalism theory, this study uses a qualitative approach involving 20 semi-structured interviews conducted with external auditors in Vietnam during 2022. This sample includes the global Big Four, global mid-tier and smaller local Vietnamese audit firms. Findings The findings indicate that there is resistance or disagreement with the suggestion that in the future audit technologies using AI tools can replace humans (external auditors). The role of external auditors in the professional services sector will gradually be changed by audit technologies; however, external auditors are unlikely to be replaced by audit technologies that use AI tools based on the responses of the participants. Strict institutional rules that exist in Vietnam would prevent the replacement of (human) external auditors. In the future, external auditors may take on new roles as consultants, with unique skills in classifying and processing data for decision-making processes; however, they will not be completely replaced by technology in the audit space. Research limitations/implications This study has limitations that it is based on the data collection from a single developing country, Vietnam; therefore, the generalisability of the findings is limited to Vietnam. Also, the authors sought insights into the future of external audits in Vietnam. Practical implications This study highlights the changing role of auditors and institutions. Thus, policymakers, external auditors and auditees in other developing countries would find the findings helpful. Originality/value This study provides new perspectives, particularly from local Vietnamese firms, about audit practices that emerge due to high-level technological advancements and then embed themselves into existing audit practices in an emerging economy. Prior studies tended to focus on the global Big Four firms, thus this study contributes by sharing the perceptions of the smaller practitioners also.

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Section: How Digital Transformation Impacts Vietnamese Auditors' Work...mentioning

confidence: 77%

Section: Prior Literaturementioning

confidence: 99%

Section: Will Audit Professionals In Vietnam Be Replaced By Audit Tec...mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Digital transformation in Vietnam: the impacts on external auditors and their practices

Nguyen,

Kend,

2024

PAR

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Audit consortium impact on audit quality assessment: evidence from Egypt

AbuRaya

2023

JFRA

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Purpose Audit consortium of joint and dual audits is one of the most controversial mechanisms aimed at improving audit quality and resolving several related debatable issues. This study aims to empirically investigate the impact of audit consortium on audit quality assessment in Egypt. It specifically examines whether audit opinion modification level is triggered by joint and dual audits existence and whether it is influenced by the relative importance of the auditor pair combination types. Design/methodology/approach A sample of companies listed on the Egyptian Stock Exchange constituting the EGX 30 index is examined over a period of five years, from 2016 to 2020. A quantitative research methodology is used, using content analysis of companies’ audit reports and carrying out longitudinal panel ordinary least squares multiple regression tests. Findings Results show that audit quality is significantly enhanced by conducting joint and dual audits of Egyptian companies’ financial statements. Findings indicate that both joint and dual audits significantly increase auditors’ propensity to modify audit opinions as compared to companies that engage in single audits. However, this increase in audit quality is not supported by the presence of Big 4 joint auditors or affiliated joint auditors, while the impact of Big 4 dual auditors cannot be confirmed. Nevertheless, such a potential increase in audit opinion modification is boosted by the presence of affiliated dual auditors, which appears to translate into higher quality. Research limitations/implications The study has important implications for researchers, corporates, those charged with governance, financial statement users, auditors, regulators and standard setters, who might be interested in whether an audit consortium and a particular auditor pair combination are associated with superior audit quality. It provides empirical evidence that might contribute to the continuous challenge of promoting the quality and effectiveness of the external audit. Originality/value This study adds to the relatively limited and challenging literature on the potential contribution of audit consortium, using audit opinion modification level as a direct assessment of audit quality. It extends the scope of prior research by examining the existence of joint and dual audits and the relative importance of joint and dual auditor pair combination types. The study provides key insights from a distinctive and complex emerging audit market.

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Determinants of Auditor Remuneration in Brazil's Basic Infrastructure Sector: An Analysis of Companies Listed on B3

Martinez,

de Jesus Moraes

2024

Preprint

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Audit quality and independence concerns after major audit reforms within a developing country: stakeholder perceptions from Vietnam

Cited by 4 publications

References 62 publications

Digital transformation in Vietnam: the impacts on external auditors and their practices

Digital transformation in Vietnam: the impacts on external auditors and their practices

Audit consortium impact on audit quality assessment: evidence from Egypt

Determinants of Auditor Remuneration in Brazil's Basic Infrastructure Sector: An Analysis of Companies Listed on B3

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