The different shades of audit quality: A review of the academic literature

Abstract

This paper reviews the academic literature on the different conceptualizations of audit quality. We argue that these discussions are rooted in the historical development of the audit profession, which has shown the need for audit quality indicators. However, we also demonstrate that audit quality means different things to different people, such that different conceptualizations of audit quality may lead to conflicts, as these views meet and need to be reconciled. The literature largely recognizes the multi-faceted nature of audit quality, which cannot be simply measured by a focus on adverse outcomes, such as restatements or fraud incidents. Instead, it is the combination of process, people and motivation that drives the quality of audit services provided by firms. Finally, the qualitative audit literature emphasizes that audit practice needs to be understood as a set of social interactions, which are embedded in a diverse set of organizational and contextual factors that together determine audit judgments and auditor behavior.

Effects of organizational climate, role clarity, turnover intention, and workplace burnout on audit quality and performance

“…While the audit quality is essential to the capital market stability and the well-being of investors, creditors and other stakeholders, no precise definition was provided for this term (DeFond and Zhang, 2014). Standards setting bodies are contributing to the process of defining and measuring the audit quality aspects like the International Auditing and Assurance Standards Board (IAASB), the Public Company Accounting Oversight Board (PCAOB) and the American Institute of Certified Public Accountants to facilitate the process of regulating this aspect in the audit process (IAASB, 2013; Public Company Accounting Oversight Board [PCAOB], 2014; PwC, 2014; Detzen and Gold, 2021; Astuty et al , 2022). Research surveys were used to determine the main attributes of the good audit quality from within the auditing profession and practice (Carcello et al , 1992; Ghafran and O’Sullivan, 2017; Samagaio and Felício, 2022).…”

“…Moreover, reducing the audit quality can be deliberate because of dishonest act by the auditor to deliver a wrong image about the fairness of the financial statements to the shareholders (i.e. audit and fraud case scandals (Elinda et al , 2019; Detzen and Gold, 2021) or unintentionally through the effects of the auditors’ surrounding environment such as work overload or the role ambiguity or the lack of organizational commitment (Glover et al , 2017; Cheng et al , 2021). Cannon and Herda (2016) stated that the undeliberate acts like role ambiguity and the overload of work and the role conflict and the burnout are the main reasons behind the reduced audit quality.…”

De tragiek van audit quality indicatoren (AQI’s)

“…Hoewel 'het goede doen' niet expliciet is gedefinieerd door de CTA lijkt het te zijn gericht op de kwaliteit van wettelijke controles. Deze focus op kwaliteit zorgt voor een dilemma, aangezien uit wetenschappelijke literatuur blijkt dat er geen eenduidige maatstaf bestaat om controlekwaliteit vast te stellen en te meten (Detzen and Gold 2021;Knechel et al 2013;Van Buuren 2015), waardoor het idee van representativiteit en uniformiteit in essentie wordt ondermijnd. Dit dilemma van weten of denken dat er een eenduidig begrip van kwaliteit kan bestaan en tegelijkertijd niet weten wat dit precies is, vraagt volgens ons om een kritische reflectie.…”

Is de kwaliteit van de accountantscontrole gestegen?

“…Knechel et al (2013) maken daarom een onderscheid tussen maatregelen ter verbetering van de kwaliteit (input), de kwaliteitswaarborgen tijdens de uitvoering van de controle (proces), en de uitkomsten van de controle (outputs). Op het moment van schrijven worden er audit quality indicators ontwikkeld om een beter beeld te krijgen van de drie niveaus van controlekwaliteit (Detzen and Gold 2021;Gold and Majoor 2021). Momenteel ontbreekt echter een beeld van de kwaliteit van de sector alsook hoe de kwaliteit zich heeft ontwikkeld in de afgelopen jaren (CTA 2020).…”