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In 2013 the International Auditing and Assurance Standards Board (IAASB) proposed the revision of the international auditing standard on the audit report (ISA 700) to meet the information needs of the users of audited financial statements. The purpose of this research was to investigate whether the International Standards Assurance and Accounting Board’s (IAASB) revised International Standard on Auditing (ISA 700) would reduce the expectation gap. It focused on the expectation gap investigation in three areas, namely: responsibilities of auditors, reliability of audited financial statements and decision-making usefulness of audited financial statements. A differential testing instrument was used in the study and completed by research subjects that comprised auditors, bankers and shareholders. Non-parametric Kruskal-Wallis H test and non-parametric Mann-Whitney test were used to analyse the data. The results of the study showed that despite the audit report modifications, expectation gap remained persistent with regard to auditors’ responsibilities. On the positive front, the study showed that the revised ISA 700 resulted in users finding audited financial statements reliable and useful for decision-making purposes.

India is one of the largest developing countries in the world. Although many issues and phenomena arising from its transitional economy are worthy of research from an accounting perspective, the Indian accounting market is a field that remains relatively unexplored in the extant literature. One of the institutional features of India is that while it is mandatory for public sector companies and banks to have joint auditors, their appointment is voluntary for other companies. In a thesis motivated by this and other institutional features and the absence of related accounting and auditing studies conducted in an Indian setting, I examine the relations of auditor type and firm ownership with the types of auditor opinions issued under the joint audit requirement. Using a sample of 1,142 firm-year observations from the major Indian stock exchanges from 2006-2008, I develop an auditor opinion model to examine the relations between firm ownership, auditor type and auditor opinions under the joint-audit requirement that applies in India. Companies’ self-selection bias for auditors is also considered and corrected using the Heckman 2-step method. Based on the empirical results, I report as follows. First, Big 4 auditors are more likely to issue modified opinions than local Indian auditors. Second, the Indian government assumes a supervisory role rather than a collusive role and the joint-audit requirement is associated with a higher level of auditor reporting quality. Finally, companies audited by joint auditors are more likely to receive modified opinions than companies audited by a single auditor. The findings provide evidence of the importance of understanding the pattern of auditor opinion in India and the incentives of joint auditors, as well as the influence this pattern has on auditor reporting quality in a transitional economy.

While Small and Medium-sized Enterprises (SMEs) constitute a significant segment of the Australian economy, and external accountants are their major service providers, little is known as to why SMEs purchase services from external accountants and what benefits they derive from those services. This thesis develops our understanding and investigates the benefits provided by external accountants, through auditing and business advisory services, to Australian SMEs. The relatively unregulated SME environment provides a unique opportunity to examine the market for professional services. SMEs, for example, can choose to be audited or not, and there is significant variation in the level of agency conflict they face. This thesis analyses data collected from two surveys of Australian SMEs. While theory suggests that auditing is a costeffective response to agency conflict, measures of this conflict are found to be associated with voluntary demand for external auditing, but not for internal auditing. Though the nature of the relationship between external and internal audit is unclear, a negative association is found between the two, suggesting substitution between these services. Whereas external audit is provided to reduce agency conflict, internal audit may be substituting for other services, unrelated to agency issues, such as providing useful information for decision making. I also investigate the economic benefit SMEs derive from auditing by measuring whether audited SMEs pay a lower interest rate on their major institutional borrowings compared with unaudited SMEs, or demonstrate superior performance. I find no evidence of a direct economic benefit on either of those measures. External accountants have responded to increasingly broad-ranging market information needs by providing an expanded range of business advisory services, and this thesis also investigates the relationship between external audit and business advice in the context of this changing market. Despite theory suggesting a complementary relationship, SMEs spend less on business advice when they also buy an audit, and this finding persists irrespective of agency considerations. The main purpose of business advice is to help improve firm performance, and SMEs buying business advice are found to perceive their business to be outperforming their competitors. This suggests a benefit associated with these services.

Thesis (Ph. D.)--Ohio State University, 1982. / Includes bibliographical references (leaves 96-97). Available online via OhioLINK's ETD Center.

Risk based audit (RBA) approaches represent a major trend in current audit methodology. The approach is based on risk analysis used to identify business strategy risk. The RBA has created a new set of research issues that need investigation. In particular, this approach has important implications for risk identification and risk assessment. The success of the RBA approach is contingent on understanding what factors improve or interfere with the accuracy of these risk judgments. I examine how budget constraints and decision aid use affect risk identification and risk assessment. Unlike previous budget pressure studies, I cast budget constraints as a positive influence on auditors. I expect more stringent budget constraints to be motivating to the auditor as they provide a goal for the auditor to achieve. I also expect budget constraints to induce feelings of pressure leading to the use of time-pressure adaptation strategies. When auditors have use of a decision aid, they take advantage of these motivational goals and/or use beneficial adaptive strategies. Overall, I find that auditor participants tend to be more accurate when identifying financial statement risks compared to business risks. Budget constraints have no effect on risk identification for financial or business risks; they also have no effect on financial risk assessments. On the other hand, business risk assessments are improved by implementing more stringent budget constraints, but only when a decision aid is also provided. Budget constraints can affect performance through a goal theory route or a time-pressure adaptation route. I investigate the paths through which budget constraints improve business risk assessments under decision aid use. I find that budget constraints directly affect performance, supporting a goal theory route. However, I do not find that budget constraints are mediated by perceived budget pressure as expected. Auditors appear to use a positive adaptive strategy to respond to perceived budget pressure, however perceived budget pressure is not induced by providing a more stringent budget.

Risk based audit (RBA) approaches represent a major trend in current audit methodology. The approach is based on risk analysis used to identify business strategy risk. The RBA has created a new set of research issues that need investigation. In particular, this approach has important implications for risk identification and risk assessment. The success of the RBA approach is contingent on understanding what factors improve or interfere with the accuracy of these risk judgments. I examine how budget constraints and decision aid use affect risk identification and risk assessment. Unlike previous budget pressure studies, I cast budget constraints as a positive influence on auditors. I expect more stringent budget constraints to be motivating to the auditor as they provide a goal for the auditor to achieve. I also expect budget constraints to induce feelings of pressure leading to the use of time-pressure adaptation strategies. When auditors have use of a decision aid, they take advantage of these motivational goals and/or use beneficial adaptive strategies. Overall, I find that auditor participants tend to be more accurate when identifying financial statement risks compared to business risks. Budget constraints have no effect on risk identification for financial or business risks; they also have no effect on financial risk assessments. On the other hand, business risk assessments are improved by implementing more stringent budget constraints, but only when a decision aid is also provided. Budget constraints can affect performance through a goal theory route or a time-pressure adaptation route. I investigate the paths through which budget constraints improve business risk assessments under decision aid use. I find that budget constraints directly affect performance, supporting a goal theory route. However, I do not find that budget constraints are mediated by perceived budget pressure as expected. Auditors appear to use a positive adaptive strategy to respond to perceived budget pressure, however perceived budget pressure is not induced by providing a more stringent budget.

Thesis (doctoral)--Universität, Zürich, 2001.

Thesis (Ph. D.)--University of Massachusetts Amherst, 2009. / Open access. Includes bibliographical references (p. 143-154). Print copy also available.

This research aims at finding out to what extent the new audit techniques, (operational auditing, value for money audit ... etc.), which have been developed by western developed countries and used by their supreme audit institutions to review government activities, could be transferred to developing countries. To be more precise, this study attempts to achieve the following objectives: (1) To study the availabile literature on the nature and objectives of operational auditing, [OA]. (2) To investigate how OA is performed in practice by some western countries, (namely Canada, Sweden, the UK and the USA). (3) To determine whether there is a need for introducing OA techniques to the Kuwaiti Public Sector, [KPS], and particularly to the Kuwaiti Audit Bureau, [KAB]. (4) Finally, to draw-up conclusions and implications for the KAB. Methods used for compiling, and analysing, data has included: (1) Library research (2) Review of government documents (3) Fieldwork in UK local and health authorities and in the State of Kuwait (4) Statistical analysis The study revealed that there is no generally accepted definition for operational auditing nor any general agreement on its main components. Furthermore, it confirmed the existence of differences of purpose and scope in the practice of OA investigations in the selected, western developed countries, (Canada, Sweden, the UK and the USA). The research concludes by identifying implications for the Kuwaiti Audit Bureau and any foreseeable obstacle which could hinder the introduction, or full adoption, of OA techniques in the Kuwaiti public sector. The researcher proposes suggestions and makes recommendations to overcome these impediments.