European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

Audit Quality

Audit Quality in Least Developed Countries: The Case of Yemen (Published)

This study aims to investigate the audit quality in a least developed country (Yemen). Using a quantitative research approach which applied a structured questionnaire to collect the data from the respondents. The current study targeted the auditing firms in Yemen (365 firms) as the population, and the sample size was calculated using Krejcie & Morgan’s (1970) sample size formula. Thus, after excluding the auditing firms those located outside of Sana`a, the final sample size was (156) firms. The collected data was analyzed using IBM SPSS statistics software, version 26. The results of this study reveal that the audit quality in auditing firms in Yemen, is relatively high compared to previous studies. The study has implications in enhancing the understanding the audit quality in auditing firms in Yemen and developing countries.

Keywords: Audit Quality, Yemen, auditing firms, least developed countries

Audit Quality and Earnings Manipulations in Nigeria: Beneish Model (Published)

The significance to prepare reliable information discloses the need to fall back on an external auditor and a quality auditing process that can caution against the management of earnings. In line with the business practice, auditing does not provide sufficient coverage for some earnings management (EM) activities that result in financial statement fraud. Over the years, capital markets around the globe have witnessed numerous corporate financial scandals largely because of financial and accounting figures’ manipulation. This has led to casting doubt on the quality of published financial reports and questioning the ability of the audit process. Against this background, this study examined the relationship between audit quality and real earnings management of listed manufacturing companies in Nigeria. Specifically, this study evaluated the effect of audit firm size, audit firm industry specialization, audit firm tenure, and audit firm independence on real earnings management. The study sampled 38 out of 55 listed manufacturing companies that cut-across different sectors from 2013 to 2020. From the multivariate analysis, the findings revealed a significant relationship between audit quality (audit firm size and audit firm independence) with a p-value of 0.014 and 0.003 respectively. It was concluded that firms audited by Big-4 firms with independence attract greater publicity and tighter scrutiny; hence, companies tend to desist from managing their earnings. The study, therefore, recommended that the management of manufacturing firms in Nigeria should persist in engaging experience audit firms with international affiliations, and they should work strictly with the CAMA, 2020 as amended by rotating audit firms after every three years as this will promote the reliability of financial statement prepared by management, and finally reduce manipulation of earnings.


Keywords: Audit Firms, Audit Quality, Earnings Management, firm independence, manipulations

An Assessment of the Relationship between Audit Tenure and Audit Quality using a Modified Jones Model (Published)

This study uses the modified Jones Model to investigate the relationship between audit tenure and audit quality with special reference to Sierra Leone. To measure audit quality, discretionary accruals calculated by the Modified Jones model is used as a proxy, while audit tenure data is manually collected. In general, the results are consistent with the hypothesis that Audit quality does not change with the increasing audit firm tenure. On the whole, partner tenure is significantly and positively related to audit quality, indicating that longer audit partner tenure improves audit quality. The audit firm tenure is also positive with audit quality, though the evidence is not significant. Therefore, the results of this research do not support the proposal of audit firm rotation.

Citation: Ezekiel K. Duramany-Lakkoh (2022) An Assessment of the Relationship between Audit Tenure and Audit Quality using a Modified Jones Model, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 4, pp.14-35


Keywords: Audit Quality, Audit tenure, auditing services

Perception of Auditors Working Environment and Audit Quality in Nigeria (Published)

Over the years several reforms have been introduced by government and various institutions charged with the responsibility of regulating and enforcing audit failure. This study therefore investigated the perception of auditors’ working environments proxied by top management support training and developing, physical working environment and autonomy to implement audit techniques on audit quality in Nigeria. The study adopted survey research design, collecting relevant data with the aid of an adopted structured questionnaire. The population comprised of auditors in both private and public sector with offices located in Lagos State. Purposive sampling techniques was adopted to select 110 auditors. The instrument was validated using Cronbach alpha reliability coefficient of the constructs ranged from 0.647 to 0.899. The descriptive and inferential statistics. The study found that auditors working environment had significant influence on audit quality (Adj: R2= 0.344, F (4, 104) = 13.656; <0.001). The study concluded that top management support training and development, physical working environment and autonomy to implement audit techniques learnt during training positively influences audit quality. It was recommended that management in charge of audit generally take cognizance of top management support, training and development of auditors, physical working environment and autonomy to implement audit techniques as a premise towards improving audit quality

Keywords: Audit Quality, Training, management support, physical working environment

Audit Committee Characteristics and Audit Quality: Exploratory and Empirical Analysis In Nigerian Oil Sector (Published)

This paper examined audit committee characteristics on audit quality in Nigeria, for 10 years spanning from 2009-2018. Specifically, this study assessed the effect of audit committee size on audit quality in the oil and gas sector and examined the effect of audit committee meetings on audit quality in the oil and gas sector. The study adopted an expo-facto research design and the population covered all the 12 listed Oil and Gas sectors; out of which, 10 firms were selected through a random sampling technique. The study used secondary data, sourced from the published financial reports of the sampled firms covering the period of 2009-2018. Through logistic regression, it was discovered that audit committee size exerted a positive significant effect on audit quality of firms in the oil and gas sector in Nigeria and that audit committee meeting exerts a positive but insignificant effect on audit quality of firms in the oil and gas sector in Nigeria. It was concluded that audit committee has a statistically significant effect on audit quality in Nigeria. Thus, it was recommended that emphasis and focus should be placed on the size of the audit committee to improve audit quality and that modalities surrounding the meetings of the committee members should be revisited. Also, adequate supervision and monitoring should be ensured in every meeting of the committee members.

Keywords: Audit Quality, audit committee characteristics, oil and gas sector

Adoption of audit software by Small and Medium-sized Practices in East Africa (Published)

Purpose: Information technology has been implemented by organizations in East Africa with most transactions and records being digital. At end of the financial year, these organizations require their financial statements to be audited. This study was to first take stock of the level of adoption of audit software by Small and Medium-sized Practices (SMPs) in East Africa. This comes at a time where the Covid-19 pandemic has led to even further computerization as organizations implemented health directives on face-to-face contact, paperless environment and work-from-home initiatives, among others.  Methodology: A questionnaire comprising seven questions were sent out to sampled firms to respond electronically via the SurveyMonkey® tool. Out of about 1310 firms, the questionnaire was sent out to a random sample of 700. Results:  A total of 251 responses were received (36% of the sample). 70% of the SMPs were 1-10 years old in practice. Only one-in-four firms (25%) had adopted audit software. The four most common audit software were CaseWare®, Myaudit, PCAS and DraftWorxTM. The three major benefits from using audit software were the improvement in audit quality, audit project efficiencies and IFRS-compliant accounts. The three main challenges faced in adoption of audit software were the high costs of the software licenses, the lack of timely vendor support and the unstable/high cost of internet connectivity. The three main suggestions to increase adoption of audit software by SMPs in East Africa were to compel all the firms to adopt, to lower the cost of the software and probably develop a home-grown solution. Significance of study: The study has helped highlight the extent of adoption of audit software. It has also revealed the most common audit software in use. With this information, the NBAAT, ICPAK, ICPAU, iCPAR and OPC can develop a 3-year roadmap to facilitate the SMPs to gradually acquire the audit software. At each Annual Practitioner’s Forum, adoption of audit software and how it enables the firm’s business to grow can become a permanent topic. This can supplement the advanced Microsoft Excel® training that is being undertaken by most of the SMPs. Future research: After a 2-year period, further research can include an in-depth interview with a sample of firms that responded to determine the influence of audit software or lack thereof on their competitiveness among fellow SMPs in their respective countries. 

Keywords: Audit Quality, Effectiveness, Efficiency, audit software

The Effect of Tax Audit on Productivity of Internal Revenue Service: Cross River State Experience (Published)

This paper focused on the effect of tax audit on productivity of Cross River State Board of Internal revenue service. The result of the study showed that tax audit strategies have direct insignificant relationship with productivity. However, tax audit is employed by the relevant tax authority (RTA) to achieve target revenue and also reduces the problem of tax evasion and avoidance. The study further revealed that tax payers do not usually cooperate with tax audit personnel during audit. That the relevant tax authority should put policies in place that would enable tax payers to cooperate with tax audit personnel during audit exercise.

Keywords: Audit Quality, IRS, Productivity, Tax

Effects of Audit Committee Expertise and Meeting on Audit Quality of Listed Consumer-Goods Companies in Nigeria (Published)

The study examines the effects of audit committee expertise and meeting on audit quality of listed consumer-goods companies in Nigeria covering a period of eleven (11) years (2006 – 2016). Longitudinal panel research design was adopted for the study. The population of the study consists of the twenty-three (23) listed consumer-goods companies on the floor of Nigerian Stock Exchange as at 31st December, 2016. The census sample size consists of fifteen (15) companies. Eight (8) companies were filtered out of which five (5) companies were listed outside the period of study and three (3) companies were without complete data. Secondary data from published annual financial statements of the sampled companies in Nigeria were used. Descriptive statistics (mean, standard deviation, minimum and maximum) and inferential statistics (correlation and multiple regression) were used for the study. The results show that audit committee expertise and meeting have positive and non significant effects on audit quality of listed consumer goods companies in Nigeria. The study concludes that audit committee expertise and meeting have no significant effect on audit quality of listed consumer-goods companies in Nigeria.

Keywords: Audit Committee, Audit Quality, Expertise, Meeting, Nigerian Stock Exchange

The Association between Audit Quality and Earnings Management by Listed Firms in Nigeria (Published)

This study examines the association between audit quality and earnings management by listed firms in Nigeria. The study measures audit quality by audit firm size and earnings management by the absolute abnormal discretionary accruals using the modified Jones model. The study was carried out in two parts, the first part is the comparative study using independent sample t-test and the Wilcoxon signed ranked test. The second part is the multivariate analysis where the association between audit quality and earnings management was examined. Based on our analysis, we found that auditor size has restrained earnings management but the decrease is not statistically significant. The implication of this finding is that users should not blindly assume that high audit quality proxy by the big 4 auditor is a symbol of earnings quality.

Keywords: Audit Quality, Earnings Management, Nigeria, auditor size

The Competency and Independency Auditors to Audit Quality at Auditors of Public Accountant in Palembang (Published)

This study aims to test the competency and independency of the Auditor on the Quality Audit Office Public Accountant Auditor Palembang. The study sample as many as 39 registered Public Accountants in Palembang, used multiple regression analysis. The results of calculations using SPSS, showed that:1) R2 of  0.499, illustrates that the quality of the audit, can be explained by the dependent variables amounted to 49.9%, while the remaining 51,1%, can be explained by other factors, which are not included in this study. ;2) Obtained value of F(7.309) Sig(0,000), means that there is a significant influence of dependent variables together to quality audit; 3) there are no significant effect from experience, knowledge, and non audit services on the quality of audit; 4) and there are  significant effect of long relationships with clients, pressure from clients, and review co-auditors on audit quality.


Keywords: Audit Quality, Experience, Knowledge, Non-audit services, long relationships with clients, pressure from clients, review co-auditor

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