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SUMMARY: Prior research finds that firms' stock liquidity is associated with more aggressive discretionary accruals and revenues, suggesting that firms face pressure to make more aggressive accounting decisions when liquidity is high. However, the literature has yet to examine whether the effects of liquidity on financial reporting quality are severe enough to impact audit risk. We address this gap and offer three main findings. First, we find a positive association between stock liquidity and the probability of restatements, suggesting that the pressures from liquidity to engage in aggressive reporting decisions are severe enough to increase audit risk. Second, we find a positive association between stock liquidity and audit fees, suggesting that auditors at least partially incorporate the audit risk from liquidity into their pricing decisions. Finally, we find that the positive association between liquidity and audit pricing is concentrated in firms with poor corporate governance mechanisms. JEL Classifications: G12; G30; M42. [ABSTRACT FROM AUTHOR]

SUMMARY: We examine whether consumer-generated tweets about purchases (interest) and sentiment are useful in assessing the risk of misstated revenue in the planning stage of the audit, as reflected in improvements to analytical procedures, for firms in consumer-facing industries. We obtain consumer-generated tweeting activities from 2012 to 2017 for 76 companies in 20 consumer-facing industries from a data provider. We find that, relative to a benchmark model, Twitter consumer interest, but not consumer sentiment, improves the prediction and error-detection ability of analytical procedures for most firms in consumer-facing industries. Our findings are robust to different model settings. In additional tests, we observe that the effect of Twitter consumer interest is more pronounced in smaller industries and that it remains useful in analytical procedures when compared to firms' advertising and employee headcount. Together, our results suggest that this new source of information improves auditors' assessments of the risk of misstated revenue. [ABSTRACT FROM AUTHOR]

Copyright of Muhasebe ve Vergi Uygulamalari Dergisi (MUVU) / Journal of Accounting & Taxation Studies (JATS) is the property of Ankara Serbest Muhasebeci Mali Musavirler Odasi and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Revista de Contabilidade & Controladoria is the property of Revista de Contabilidade & Controladoria RC & C and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

I investigate the impact of the disruption of free information access via search engines on audit fees using a quasi‐natural experiment provided by Google's withdrawal from China. Employing a difference‐in‐differences design, I document an increase in audit fees for firms with overseas business relative to firms without overseas business after Google's withdrawal. The results are robust to matched samples, placebo tests, alternative specifications, excluding alternative explanations and different event windows. This trend in audit fees suggests that Google's withdrawal hampers firms' foreign information streams and increases audit risk and audit effort. Consistent with this argument, after Google's withdrawal, firms with overseas business conduct more earnings management, pay more abnormal audit fees and experience longer audit report lags. Furthermore, the increase in audit fees is greater for firms with poor information environments, more retail investors or non‐Big 4 auditors. My findings suggest a potential auditing cost of restricting the free flow of public foreign information about firms. [ABSTRACT FROM AUTHOR]

We compare a group of firms switching auditors while their annual audit is underway (LateSwitches) with two control groups: firms switching their auditors during the fourth quarter of the fiscal year and firms switching their auditors during the first three quarters. First, we find that LateSwitches tend to be riskier with regard to litigation risk, audit risk and business risk. Second, we find that LateSwitches have a higher chance of announcing restatements and receiving going concern opinions in the first year of audit with the successor auditor. Despite the higher risks, we fail to find that LateSwitches disclose more adverse events in Forms 8‐K than other groups. We also document that stock market returns following an auditor change are more negative for LateSwitches. These results indicate that LateSwitches stand to face significant negative consequences when the relationship with their auditor is terminated abruptly in the final phases of an audit. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine whether clients' degree of digitalization and audit firms' expertise in information technology (IT) influence audit quality (AQ). Design/methodology/approach: Data of Chinese A-share firms listed on the primary board of the Shanghai and Shenzhen stock exchanges from 2011 to 2019 are taken as the sample. All the data are obtained from the China Stock Market and Accounting Research. Clients' digitalization is determined using the keywords "AI technology," "blockchain," "cloud computing," "big data technology" and "digital technology." Auditor firm's digital expertise is determined by the proportion of higher IT expertise. As the proxy for AQ, this study uses audit fees, given that its quantum reflects the effort auditors expend that in turn affects the AQ. Findings: A fixed-effect regression model shows that clients with high digitalization attain AQ. This study also finds a significant and positive coefficient of audit fees, indicating that AQ is high in the same situation if an audit firm's IT is mature and developed. Furthermore, results confirm the moderating effect of clients' digitalization and auditors' expertise and on AQ. Auditors' expertise in IT mitigates the audit risk and increase AQ. Originality/value: Findings can enhance AQ and corporate governance literature by clarifying how external audits must evolve through digitalization and incorporating newly developed digital tools such as big data, analytics, artificial intelligence and robotic process automation. This study also provides important insights regarding how the development of new digital tools allow the audit profession to perform as a corporate governance mechanism. [ABSTRACT FROM AUTHOR]

The current study investigated whether the cognitive neuroscience dimension affects auditors' judgment in an increasingly competitive emerging audit market. In addition, other influential dimensions, including "identity characteristics," "biological characteristics and moral values and spirituality," and "environment" were also considered. The research was a descriptive survey, and the statistical population consisted of independent auditors. The field survey and questionnaire were used for data collection. The results generally showed that the cognitive neuroscience dimension affects auditors' judgment positively. Among the examined factors, "the auditor's selectivity about which problems to solve," "the auditor's level of attention," and "the level of concentration" were the most important factors. In addition, other investigated dimensions, including "identity characteristics," "biological characteristics and moral values and spirituality," and "environment," were considered influential factors. The findings imply that different neuroscience factors that require more research in this area affect auditors' judgment and performance. Studying cognitive neuroscience factors as a novel stance to the audit literature can help auditors improve their professional judgments and opinions, resulting in reduced audit risk and increased audit quality. It can also help develop a new era in interdisciplinary studies via associating decision-making with cognitive theories and implementing neuroscience related technologies. [ABSTRACT FROM AUTHOR]

• Prior work finds inconsistent effects of tax audits on post-audit tax compliance. • Field studies often find positive and laboratory studies often find negative effects. • We study potential explanations for these inconsistent findings. • We find that misperception of risk and learning effects drive behavioral responses. • Accounting for censoring effects eliminates negative post-audit effects. What is the compliance effect of experiencing a tax audit? Empirical studies typically report a positive effect, while laboratory experiments frequently report a negative effect. We show experimentally that whether a tax audit increases or decreases subsequent compliance hinges on the balance of learning opportunities, misperception of audit risk, and the confounding effect of censoring. After an audit, taxpayers lower their perceived risk of audit – consistent with a bomb-crater effect – when audit selection is exogenous. However, for an endogenous audit rule under which taxpayers can learn to reduce their audit risk by reporting higher income, learning effects outweigh probability misperception, resulting in an increase in post-audit tax compliance. Finally, we show that accounting for censoring effects can eliminate on its own the negative post-audit compliance effect frequently observed in laboratory experiments. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Administrative & Economic Sciences is the property of Al-Manara Consultancy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: The purpose of this study is to examine whether the change in accounting standards from the rules-based local GAAP to the principles-based IFRS influences a manager's opportunistic auditor choice for a favorable audit opinion, opinion shopping (OS) behavior. The authors view that IFRS adopters exploit the flexibility of IFRS to their advantage and search for auditors that are more likely to give clean opinions. However, auditors may refuse to yield to client pressure for OS, because of the greater potential audit risk under principles-based standards. Design/methodology/approach: This study applies a difference-in-differences methodology by using Korean listed firms (i.e. IFRS adopters) as a treatment sample and Korean unlisted firms that do not voluntarily adopt IFRS (i.e. K-GAAP users) as the control sample. OS behavior is measured by the methodology of Lennox (2000). Findings: The results of this study show that the OS behavior of IFRS adopters increases after IFRS adoption compared to that of K-GAAP users. This phenomenon is more prevalent when they are audited by non-Big 4 auditors or when they are economically important to auditors. These suggest that the principles-based IFRS without specific rules increase the scope of OS, and auditors tend to accept OS clients by weighing up its costs and benefits. Originality/value: This study contributes to the literature on OS by presenting that the approach of accounting standards can be an important influencing factor on a firm's successful engagement in OS. This finding also provides policy implications for many economies by suggesting mechanisms that can be developed to reduce clients' opportunistic auditor choices under principles-based accounting standards. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the effect of prior years' audit adjustments, a proxy for auditors' private information regarding the persistence of their clients' audit risk, on audit pricing in the current year. Design/methodology/approach: The authors use unique data sets of audit adjustments and audit fieldwork days from China, and a regression approach, to test their hypothesis. Findings: The authors find that larger previous audit adjustments are associated with higher current-year audit fees, which is partially attributed to increased audit effort. The authors further document that the results are more pronounced when audit adjustments are consistently made in the same direction or more recent; in these cases, a larger percentage of the total effect is also attributable to the risk premium, instead of audit effort. Finally, the authors find that the effect of previous audit adjustments on current-year audit fees is stronger for firms with younger chief executive officers and specialist auditors. Originality/value: To the authors' best knowledge, they are the first to test the implication of auditors' private information in setting audit fees. In addition to demonstrating that audit fees consist of a risk premium and a component to cover related costs, the authors further show variations in the relative importance between costs and risk premium under various contexts. [ABSTRACT FROM AUTHOR]

To build trust, SMEs must pass on information as clearly as possible, which can be achieved through a transparent financial reporting process. The article aims to study the impact of six accounting quality risk indicators in audit risk assessment from SME audit reports in EU countries, comparing the findings with the analysis of the same indicators at CEECs level. The qualitative research methodology consists of a descriptive study of the risks in the audit reports, emphasizing their types and connection with the company's characteristics. The study is based on a sample of 443 SMEs listed on the European stock markets and included in the Audit Analytics database, an online platform with information from the company's financial statements and audit reports. According to the results, the "Audit Fees-Significant Non-Audit Fees" indicator had the highest accounting quality risk impact on SMEs audit reports in the EU. In contrast, for the CEECs companies, the "Audit Fees–Significant Change" index had a more significant impact on the audit reports. The study's results showed an average trend of 15–16 reported situations per year, with a substantial increase over recent years for CEECs. The main conclusion from the study is that the uncertainties reported by the auditors depend more on the company's field of activity and how it is managed; therefore, the SME sector should be coordinated according to the accounting regulations regarding the principles and the content of the financial reports. Considering the fast evolution of risks that may affect the audit reports of a small company and the fact that this topic has yet to be thoroughly researched, we find it relevant. The contribution of this article consists of a systematic analysis of the audit risk matrix completing the existing literature, which is why the field can be discussed more widely. [ABSTRACT FROM AUTHOR]

The purpose of this study is to empirically examine the relations between audit outcomes and accounting standard design (principles-based vs. rules-based) for US firms. Considering that audit outcomes may vary with audit risk, which may differ under different accounting standards, we examine and find that audit risk and audit fees are lower when client firms rely more on principles-based standards. Next, we find that principles-based standards are associated with a lower likelihood of receiving a going concern opinion and with a shorter audit report lag. However, for firms that rely more on principles-based standards and have greater incentives to engage in earnings management, audit fees are higher. Collectively, our results inform the FASB, the SEC, and the PCAOB of the potential benefits of using principles-based standards with respect to audit outcomes and, more broadly, provide evidence on the role of accounting standard design in auditing. [ABSTRACT FROM AUTHOR]

This study examines the influence of local gambling attitudes on audit quality. As a preference for gambling correlates to a greater tendency to take risks, we hypothesize that auditors make a greater magnitude of audit adjustments for clients headquartered in gambling‐prone areas to reduce heightened audit risk. Consistent with our hypothesis, the empirical results show a positive relation between local gambling attitudes and the magnitude of audit adjustments. Further analyses show that this association is more pronounced when the regulatory cost is higher, and when the board chair or CEO comes from a gambling‐prone area. We also find evidence that gambling culture results in greater magnitudes of both upward and downward audit adjustments, audit firms appoint more experienced audit partners to gambling‐prone clients, and there is a fee premium for gambling‐prone clients. [ABSTRACT FROM AUTHOR]

Audit fees and audit quality have received the attention of stakeholders, clients, audit firms, and third parties. Each subject has its own opinion on determining influencing factors and their relationship. This study aims to investigate the determining factors of audit fees and audit quality in Vietnam. Using random data collection, a questionnaire was created on Google forms and sent to auditors from the 4th quarter of 2020 to the end of the 1st quarter of 2021. 267 valid auditors’ responses in 28 audit firms were used for data analysis. Exploratory factor analysis (EFA) was used to determine relationships between observed variables and factors. The measurement model and recommended hypotheses were confirmed by structural equation modeling (SEM) using SPSS 26 and AMOS 26. The study results show that contract types and audit complexity, audit firms’ reputation, size, and risk significantly impact audit fees and audit quality. In addition, the specialization of the audit firms does not have a positive effect on audit quality but on audit fees. The audit tenure has no statistical impact on audit fees and audit quality. Notably, audit fees statistically affected audit quality. Several implications can be applied, such as increasing the firm size, performing the procedures in response to audit risk, separating audit contract types, and determining the complexity of audit projects and specialties.

We investigate the use of disruptive technology on the level of audit risk, within both companies and audit firms. A sample of FTSE 100 and their corresponding audit firms—specifically, the 'Big 4'—are selected for the period 2015 to 2020. Our findings indicate that the utilisation of disruptive technology results in a significant reduction in audit risk for both companies and audit firms. Disruptive technology seems to promote benefits to companies and audit firms by significantly mitigating the risk of material misstatements (i.e. inherent and control risk) and detection risk; these results are consistent across various industry classifications. • Disruptive technologies are investigated in association with the level of audit risk. • Both companies and audit firms are examined to offer a comprehensive analysis. • Disruptive technologies significantly reduce inherent risk and the control risk. • Audit firms mitigate the detection risk by leveraging disruptive technology. • we perform additional tests to identify the heterogeneity of the industries. [ABSTRACT FROM AUTHOR]

• We examined if memory of a recent drinking episode influenced alcohol motivation. • Recall of recent drinking led to slower consumption of alcohol. • Those with higher AUDIT risk drank at a faster rate. • This suggests that memory cues could be a useful way to decrease alcohol desire. Research has consistently demonstrated the effects of alcohol on memory, but the extent to which memory influences prospective drinking behaviour has not been studied extensively. Here, we adapt and extend theory from the food domain to explore whether memory for a previous drinking episode can reduce the motivation to consume alcohol. Female participants (N = 50) completed the Alcohol Use Disorder Identification Test (AUDIT) and were then cued to recall either a previous alcohol drinking episode and estimate the number of alcohol calories consumed (Alcohol Cue, AC) or a control (Neutral Cue, NC). They then consumed an alcoholic beverage in their own time followed by providing an estimate of subsequent alcohol intake. We found that the duration to finish the drink was longer in the AC versus NC condition. Additionally, irrespective of condition, those individuals at a higher alcohol (AUDIT) risk, consumed the drink at a faster rate and wished to consume more subsequent alcohol. These findings suggest that for females, memory for a previous drinking alcohol episode, reduces subsequent desire for alcohol and could offer a potentially useful way to help avoid excess alcohol consumption. [ABSTRACT FROM AUTHOR]

Consider the effect of the factors of financial and economic environment of the organization on the occurrence, classification, information technology management processes and methods for assessing risks in accounting and auditing. Proposed content and sequence of procedures for risk assessment in accounting.

The study examines the relationship between corporate governance mechanisms and audit risk in firms listed on the Tunisian Stock Exchange (TSE). The study covers the period 2006–2013. Panel regression analysis was used to estimate the relationship between corporate governance variables and audit risk. The results show that board size, board independence and institutional ownership were negatively related to audit risk. It is also discovered that audit risk index level increases as poor corporate governance. These findings may have important implications for analysts, investors, regulators and academics. First, the identifying factors that may influence the audit risk can help guide the reforms to improve the functioning of the financial market. Second, the study provides ample evidence of risk governance problems in the Tunisian market, highlighting the necessity of new corporate governance requirements. This study is unique in providing Tunisian evidence on the effect of corporate governance on audit risk. This paper is also relevant as it develops an index of audit risk and risk corporate governance. [ABSTRACT FROM AUTHOR]

Relevant and reliable financial statements are information characteristics that are important for stakeholders in making decisions. The public accounting profession is a profession of public trust. In order to support his professionalism as a public accountant, in carrying out his audit duties, the auditor should be guided by the Professional Standards of Public Accountants (SPAP) set by the Indonesian Institute of Accountants (IAI). The motivation of researchers to conduct this research is because audit quality is currently very important for companies and shareholders. After all, many of the audits carried out by Public Accounting Firms do not carry out audit procedures and do not carry out the auditor's ethics that should be in conducting audits so that users of financial statements do not trust them. This study uses quantitative data with survey research. The results show that Time Budget Pressure has an effect on Audit Quality with Auditor Ethics as a moderating variable, while Audit Risk has no effect on audit quality with Auditor Ethics as a moderating variable. [ABSTRACT FROM AUTHOR]

The paper investigates the trade-off between audit efforts and audit risk post implementation of IFRS and its impact on audit fees for selected publicly listed nonfinancial Indian firms. The sample consisted of 750 firm-year observations from the nonfinancial companies listed on Bombay Stock Exchange from FY2009-10 through FY2018-19. We used the Dynamic Ordinary Least Squares (DOLS) regression model in a panel framework and ensured robustness by introducing observant variables. The study found a significant decrease in the audit fee growth in the post-IFRS period, which was justified by the trade-off between audit efforts and audit risk. Further, the study found that improved disclosure, accounting quality, and auditor rotation negatively impacted audit fees. Auditor expertise was found to significantly increase audit fees. To the best of the authors’ knowledge, this is the first study to analyze the association between IFRS and audit fees by critically examining the trade-off between audit efforts and audit risk post FRS implementation in emerging countries. The findings of our study have significant implications not only for the upcoming phases of mandatory IFRS implementation in India but also for emerging and developing economies that intend to mandate IFRS. The firms intending voluntary adoption of IFRS can also use this study to make informed decisions. [ABSTRACT FROM AUTHOR]

This study aims to try to highlight the role of the effective internal control system in assessing audit risks, On a sample of account keepers and accountants, the study concluded that the effective internal control system contributes to providing the important pillars on which the audit risk assessment process depends, including a good understanding of the nature of the institution's activity, providing sufficient and appropriate evidence, in addition to choosing the appropriate inspection method. [ABSTRACT FROM AUTHOR]

This study examines the relationship between corporate philanthropy (CP) and audit fees. Using corporate donation data from China, our investigation finds that CP is significantly positively associated with audit fees. Resource‐seeking purpose and the enhanced publicity effect may be plausible channels behind this relationship. We further find that the frequency and intensity of donations reinforce this positive association. Additional analysis reveals that the resource‐seeking effect exists in any type of enterprise, while the enhanced publicity effect only exists in non‐SOEs. Our main results remain robust to a battery of additional tests. Overall, our findings suggest that by increasing audit workload and prospective audit risk, CP could make auditors more conservative such that they charge a higher audit fee. This article emphasizes the dialectic institutional stakeholder perspective in understanding the economic consequences of CP. Both the theoretical contributions and practical implications of these findings are discussed. [ABSTRACT FROM AUTHOR]

Auditor knowledge is a key element in explaining the supply of audit quality, yet understanding of the drivers of this knowledge in the archival literature is limited. This study uses an archival approach to examine whether the sharing of auditors among firms in banking relationships results in information transfers that improve audit quality. I find that audit quality improves for both borrowers and lenders who share the same auditor office. Specifically, lenders who share an auditor office with their borrowers have more accurate loan-loss provisions, especially lenders with smaller commercial loan portfolios. Borrowers who share an auditor office with their lender are less likely to receive a clean audit opinion just prior to bankruptcy. Overall, these findings are consistent with shared auditors in banking relationships developing client specific knowledge that is transferable across clients and industries. JEL Classifications: G21; M41; M42. [ABSTRACT FROM AUTHOR]

The main purpose of this study is to explain the effect of confirmation bias on audit quality and the moderating roles of client characteristics (market value and institutional shareholder’s ownership) and auditor (industry specialist auditor and first-class stock exchange trusted auditor) on audit quality and the relationship between them. For this purpose, a sample of 146 firms listed on the Tehran Stock Exchange, including 1314 firm-year during 2012-2020, was collected and analyzed. In this study, financial restatement and the absolute value of discretionary accruals were used as audit quality proxy. The results showed that confirmation bias has a negative effect on audit quality. The results also demonstrated that the adverse effects of confirmation bias on audit quality are less for clients with high market value, high institutional ownership percentage, and audits performed by industry specialist auditors and first-class stock exchange trusted auditors. The findings of this research could lead to the development of theoretical foundations in the audit context, especially audit judgment and audit risk assessment. Further, the study results suggest that additional training in order to mitigate the auditors’ use of heuristics may be beneficial. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Quantitative Economics Studies (JQES) is the property of University of Kasdi Merbah Ouargla and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Prior studies in general suggest a positive association between auditor tenure (the length of an auditor-firm relationship) and reporting quality (the informational content of reported earnings). In this study, we present evidence that the association is reversed when clients represent increased litigation risks to their auditors. Featuring downward biases in reported earnings as a measure of reporting quality that stem from auditors' minimization of costs from potential audit errors, we argue that the magnitude of such downward bias decreases in auditors' experiences with their clients (tenure improves reporting quality). Furthermore, we predict that longer auditor tenure is associated with larger downward bias for firms with increased audit risks (tenure impairs reporting quality). Using non-operating accruals as proxy for downward bias in reported earnings, we find robust empirical evidence in support of our prediction. [ABSTRACT FROM AUTHOR]

This study examines the impact of financial statement comparability on audit pricing. Using the comparability measures of De Franco, Kothari and Verdi, we find that auditors charge lower audit fees for clients with greater financial statement comparability. This negative relation is more pronounced when auditors are industry specialists or clients in industries with higher operational heterogeneity. We also find that clients with greater financial statement comparability have lower audit risk, and their auditors exert less audit effort to provide assurance. Our study contributes to the current literature by documenting that homogeneity in financial statement reporting decreases audit risk and increases audit efficiency, reducing audit pricing. [ABSTRACT FROM AUTHOR]

Research question: This study investigates and analyzes the influence of earnings management on audit report lag. It also intends to develop a thorough understanding regarding the mediating effect of audit risk on this relation. Motivation: The outcomes of this paper will help to bridge the knowledge gap related to this issue in developing countries due to the importance of audit delay as it relates to corporate transparency. Idea: The issue of reporting delay is important as it relates to corporate transparency. Data: This study is based on a sample consisting of 28 Tunisian companies listed in the Tunis Stock Exchange (TSE) over the periods 2005 to 2010 (pre-2011 revolution) and 2011 to 2017 (post-2011 revolution). Tools: Consisting of 364 observations for the whole period, Structural Equation Modeling (SEM) approach is applied and three models are developed to examine the direct and the indirect link between earnings management and audit report lag. Findings: The results show that firms which manage their earnings upward are more likely to accelerate the release of their financial statements. In addition, in the Tunisian context, audit risk mediates the relationship between earnings management and audit report lag. Contribution: This study extends the existing literature by examining the mediation effect of audit risk on the relationship between earnings management and audit report lag.

Linguistic features of information provided by business unit management could facilitate the goals of the transmission of economic facts. In recent years, these characteristics have always been considered in research in the field of accounting and behavioral finance. Therefore, this study seeks to examine the effect of financial reporting tone on audit fees. The sample consists of 63 companies listed in Tehran Stock Exchange for the period from 2012 to 2019. Financial reporting tone is measured using the model introduced by Muhammad et al (2019). Also, a natural logarithm is used to measure audit fees. The data are analyzed and the hypotheses are tested based on the multivariate regression model and panel data. The findings show that financial reporting tone has a significant negative effect on audit fees. In other words, if the financial reporting tone conveys an optimistic tone, the audit fee will be less. Results indicate that financial reporting tone reflects factors that auditors consider in assessing audit risk.

Auditing is an effective solution to limit the managers' powers in contractual relations. Audit fees reflect the quality of audits for external users of financial statements. The fee amount is responsible for the number of audit efforts or estimate of the total audit risk of the client unit. This study aims to analyze the factors affecting the audit fee in co-operative companies from 2009 to 2019 by using the information of 70 selected companies. This study results showed that the auditor's amount of sales (company revenue) gender diversity increases the audit fee. In other words, if the auditor receives more fees, he makes more effort and has a better quality of work. In addition, auditing firms that benefit from female managers and auditors have higher auditing fees because women are more riskaverse, more conservative, more accurate, and more sensitive to complex issues. [ABSTRACT FROM AUTHOR]

For about three years now, the COVID-19 pandemic has kept the global economy on tenterhooks. Although the pandemic has now been declared "over", the consequences of this mega-example of disruptive developments are still being felt everywhere, also regarding the work of Internal Audit. In particular, the spatial and personnel distance from operational activities due to lockdown and home office raise the question of whether these serious changes in the audit environment have possibly also changed the audit risk. This paper attempts to address this question using the Audit Risk Model (ARM) and a survey of audit experts to operationalize a comparison of audit risk before and after COVID-19. The results suggest that the pandemic has significantly changed the audit environment and, moreover, is expected to increase audit risk. As a result, Internal Audit needs to react promptly to adapt its effectiveness to the increased requirements and thus be able to fulfill its responsibility as a "third line" of corporate governance in the future. [ABSTRACT FROM AUTHOR]

This paper examines whether auditors plan engagements to be the same‐as‐last‐year (SALY) and if they respond to changes in risk both before and during audit engagements by varying engagements from planned. These are important questions considering audit standards require the assessment of risk and general concerns about audit quality and fee pressure. We provide new insights using a proprietary database containing both quoted and reported audit hours and fees. We find that the basis quoted audit hours and billing rates (i.e., audit plans) are prepared on is not SALY. However, as there is little difference for audit hours, we conclude that they are based‐on‐last‐year (BOLY). Changes in audit characteristics are associated with the variance between quoted and reported audit hours and billing rates. In addition, auditors with higher reputational risk quote more audit hours and have a higher quoted average billing rate and further increase them from quoted. [ABSTRACT FROM AUTHOR]

This paper examines how credit rating agencies affect audit fee. We find robust evidence that the coverage of investor-paid rating agency increases audit fee. The coverage of investor-paid rating agency increases bad news disclosure and makes the tone of media reports on the firm more negative. Auditors get informed and more aware of the firm's risk, resulting in higher audit fee. Our findings suggest that the monitoring roles of auditors and credit rating agencies are complementary to each other. The cross-sectional analyses suggest that the effect of investor-paid rating agency on audit fee is more prominent for firms with high risk and poor corporate governance. To sum up, the coverage of investor-paid rating agency has a spillover effect on other participants in capital markets. [ABSTRACT FROM AUTHOR]

This article provides some lessons for auditing during emergencies. First, during a pandemic, the supreme audit board (SAB) can maintain stability and its legitimacy by completing statutory audits in line with the law and, at the same time, by giving clean audit opinions despite a lack of persuasive audit evidence. Second, regulators should develop audit regulations and guidance for audit during unprecedented events. Third, local governments and the SAB should invest in information technology in order to perform audit procedures remotely and virtually. ABSTRACT This article investigates the effects of the Covid-19 pandemic on the audit of local government financial statements in Indonesia. Auditors were only able to perform limited, simple audit procedures due to the large-scale social restrictions. Auditors completed their statutory audits by compromising in terms of accepting a higher audit risk, being more tolerant towards material misstatements and giving clean opinions. [ABSTRACT FROM AUTHOR]

This study examines the data envelopment analysis (DEA) model for audit risk evaluation which was initially developed by Bradbury and Rouse (2002) and reinterpreted by Davutyan and Kavut (2005). Bradbury and Rouse (2002) apply the standard DEA model for audit risk factors, including judgemental (ordinal) measures. In the presence of ordinal data, efficiency analysis in DEA requires appropriate models to be applied instead of the standard DEA model. Accordingly, audit risk evaluation based on the standard DEA model is not assessed appropriately because the risk factors are qualitative and ordinal measures. Hence, we employ an appropriate DEA model to accurately evaluate audit risk in the presence of ordinal data. In light of the prior two studies, our results demonstrate the appropriateness of the ordinal DEA model. [ABSTRACT FROM AUTHOR]

The purpose of this study is to analyze whether engagement quality control review (EQCR) hours affect auditor changes and whether abnormal audit fees and changes in management have moderating effects on the relation between EQCR hours and auditor changes. The logit regression model is designed to investigate the relation between EQCR hours and auditor changes. The study finds evidence that EQCR hours are higher before auditors are changed. It also documents that abnormal audit fees weaken and that changes in management strengthen the positive relation between EQCR hours and auditor changes. In summary, high EQCR hours increase the probability of auditor changes, and the results imply that EQCR hours are a proxy for the audit risk perceived by auditors. This research is the first empirical study to test the relation between EQCR hours and auditor changes.