Education, Experience, and Audit Effort

Che, Limei; Langli, John Christian; Svanström, Tobias

doi:10.2308/ajpt-10643

Cited by 9 publications

(40 citation statements)

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“…As competency is a function of AQ, competent auditors provide more qualified audit services. Che et al (2017) asserted that experienced auditors have more knowledge, so when they audit financial statements they are more successful in detecting material misstatements. More experienced auditors exert more effort.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…Formal education level (EducationLevel) and formal education type (EducationType) of the auditor may be important to enhance AQ. Auditors with master's or PhD degrees in the accounting and auditing related fields are more competent and have more knowledge than auditors with bachelor's degrees (Che et al, 2017;Li et al, 2017). Auditor tenure (TenureA) is checked in this paper.…”

Section: Control Variablesmentioning

confidence: 99%

“…When faced with complex audit tasks, they may easily and successfully overcome them (Abdolmohammadi and Wright, 1987;Wang et al, 2015;Sonu et al, 2016;Zimmerman and Nagy, 2016). They have the ability to detect particular errors and material misstatement, and they are less likely to miss many kinds of errors (Libby and Frederick, 1990;Bédard and Biggs, 1991;Tubbs, 1992;Hammersley, 2006;Chen et al, 2015;Che et al, 2017;Liu et al, 2017). They are more confident, and this confidence makes them more accurate in judgment (Chung and Monroe, 2000) and more independent due to less influence by management (Chi et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

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Do government-experienced auditors reduce audit quality?

Ocak

Can

2019

MAJ

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Purpose Recent studies regarding auditor experience generally focus on auditor overall experience in accounting, auditing, finance and related fields (Hardies et al., 2014), auditor sector and domain experience (Bedard and Biggs, 1991; Hammersley, 2006), auditor experience as CPA (Ye et al., 2014; Sonu et al., 2016) or big N experience (Chi and Huang, 2005; Gul et al., 2013; Zimmerman, 2016) or auditors’ international working experience (Chen et al., 2017). But there is little attention paid to where auditors obtained their experience from? And how do auditors with government experience affect audit quality (AQ)? This paper aims to present the effect of auditors with government experience on AQ. Design/methodology/approach The authors used Turkish publicly traded firms in Borsa Istanbul between the year 2008 and 2015 to test the hypothesis. The sample comprises 1,067 observations and eight years. Two main proxies of government experience are used in this paper. The first proxy is auditor’s government experience in the past. The second proxy is the continuous variable which is “the logarithmic value of the number of years of government experience”. Further, auditor overall experience in auditing, accounting, finance and other related fields are also used as a control variable. Audit reporting aggressiveness, audit reporting lag and discretionary accruals are used as proxies of AQ. Besides this, the authors adopted the model to estimate the probability of selecting a government-experienced auditor, and they presented the regression results with the addition of inverse Mills ratio. Findings The main findings are consistent with conjecture. Government-experienced auditors do not enhance AQ. They are aggressive, and they complete audit work slowly and they cannot detect discretionary accruals effectively. Spending more time in a government agency makes them more aggressive and slow, and they do not detect earnings management practices. The Heckman estimation results regarding the variable of interest are also consistent with the main estimation results. In addition, the authors found in predicting government-experienced auditor choice that family firms, domestic firms and firms that reported losses (larger firms, older firms) are more (less) likely to choose government-experienced auditors. Research limitations/implications This study has some limitations. The authors used a small sample to test the impact of government-experienced auditors on AQ because of data access problems. Much data used in this study were collected manually. Earnings quality was calculated using only discretionary accruals. Real activities manipulation was not used as the proxy of AQ in this paper. The findings from emerging markets might not generalize to the developed countries because the Turkish audit market is developing compared to Continental Europe or USA. Practical implications The findings are considered for independent audit firms. Audit firms may employ new graduates and train them to offer more qualified audit work for their clients. The results do not mean that government-experienced auditors should not work in an audit firm, or that they should not establish an audit firm. It is clear that government-experienced auditors provide low AQ in terms of audit reporting aggressiveness, audit report lag and discretionary accruals. But as they operate more in the independent audit sector, they will become successful and provide qualified audit work. One other thing we can say is that it is perhaps better for government-experienced auditors to work in the tax department of independent audit firms. Originality/value This paper tries to fill the gap in the literature regarding the effect of auditor experience on AQ and concentrates on a different type of experience: Auditors with government experience.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Control Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Do government-experienced auditors reduce audit quality?

Ocak

Can

2019

MAJ

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show abstract

“…When faced with complex audit tasks, they may easily and successfully overcome them (Abdolmohammadi and Wright, 1987;Wang et al, 2015;Sonu et al, 2016;Zimmerman and Nagy, 2016). They have the ability to detect particular errors and material misstatement, and they are less likely to miss many kinds of mistakes (Libby and Frederick, 1990;Bedard and Biggs, 1991;Tubbs, 1992;Hammersley, 2006;Che et al, 2017;Liu et al, 2017). They are more confident, and this confidence makes them more accurate in judgment (Chung and Monroe, 2000) and more independent due to less influenced by management (Chi et al, 2016).…”

Section: Generic Experiencementioning

confidence: 99%

“…As competency is a function of Audit Quality, competent auditors provide more qualified audit services. Che et al (2017) asserted that experienced auditors have more knowledge, so when they audit financial statements they are more successful in detecting material misstatements. More experienced auditors exert more effort.…”

Section: Generic Experiencementioning

confidence: 99%

Understanding the Mechanism of Workload Distribution Among Auditors in BPK RI in Relation to Gender: An Exploratory Study

Suhud¹

2019

ASSRJ

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The purpose of this study is to provide a relevant conceptual model of the mechanism of workload distribution among auditors in BPK RI in relation to gender. The exploratory research was conducted to achieve its research objectives with six respondents are chosen for this study. Thematic analysis with coding technique, document analysis, and observation are used to collect and analyze the data. The result shows that there is no regulation which explains explicitly in detail about the working mechanism of the auditor when carrying out the auditing task. Also, the researcher did not find an explanation of how the procedure for distributing workload to the auditor after the audit team was determined. It means that the mechanism of workload distribution among auditors implements in the field with the non-technical guideline. Another finding shows that BPK RI does not differentiate treatment of auditors based on gender. Male and female employees have the same rights and obligations as auditors. However, in practice in the field, there are still differences in treatment between male and female auditors, especially related to the distribution of workload when conducting the audit tasks. However, the difference in treatment does not affect the amount of compensation they receive and does not affect their career development opportunities. Finally, the researcher offers a conceptual model to answer the objective of this research.

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