audit standards and auditors quality performance

Introduction

The relationship between auditing standards and the quality of auditors' performance is a critical area of research in the field of accounting and auditing. This synthesis aims to present key insights from multiple research papers on how auditing standards influence auditor behavior, performance, and overall audit quality.

Key Insights

Impact of Auditing Standards on Audit Quality:
- Stricter auditing standards can increase audit quality by mitigating auditors' misalignment of interest with investors, but they may also reduce auditors' incentives to exercise professional judgment, leading to a compliance mentality .
- High-quality auditing standards are essential for defining audits, promoting consistency, and influencing auditor behavior positively .
Auditor Skill and Performance:
- The quality of audits is directly related to the skill level of auditors. Higher skill levels lead to better audit quality, regardless of whether these skills are observable.
- Auditors' performance is positively correlated with their competency and ability to comply with auditing standards.
Role of Auditor Independence:
- Auditor independence is crucial for high audit quality. More independent auditors tend to provide higher quality audits.
Quality Assurance and Internal Auditing:
- Internal auditing standards, such as those implemented by the Institute of Internal Auditors (IIA), emphasize quality control and have undergone significant revisions to enhance internal audit activities.
- Quality audits are effective management tools for assessing compliance and improving business performance, but they require adequate confidence from stakeholders to be effective.
Auditor Specialization and Forecast Accuracy:
- Firms audited by Big 5 auditors or industry specialist non-Big 5 auditors show higher analyst earnings forecast accuracy and less forecast dispersion, indicating better audit quality.

Conclusion

The research collectively indicates that auditing standards play a pivotal role in enhancing audit quality by defining audit processes, promoting consistency, and influencing auditor behavior. However, the effectiveness of these standards is also dependent on the auditors' skill levels and independence. Internal auditing standards and quality assurance frameworks further contribute to the overall effectiveness of audit systems. High-quality audits are associated with better financial reporting and forecast accuracy, particularly when conducted by specialized auditors.

Audit standards and auditors quality performance

Summary

Introduction

Key Insights

Conclusion

Sources and full results

Auditing Standards, Professional Judgment, and Audit Quality

Stricter auditing standards can increase audit quality, but may restrict professional judgment and lead to compliance mentality, potentially benefiting auditors at firms' expense.

Approaches to auditing standards and their possible impact on auditor behavior

Auditing standards influence auditor behavior, define audits, promote consistency, and judge performance, but different approaches to standard-setting impact audit quality over time.

AUDITOR'S SKILL, AUDITING STANDARDS, LITIGATION, AND AUDIT QUALITY

Audit quality increases with auditor skill, but higher auditing standards may lead to decreased audit quality and economic welfare, while unobservable auditors may supply audits of quality exceeding prevailing standards.

Audit Quality and Properties of Analyst Earnings Forecasts

High-quality audits provided by Big 5 and industry specialist non-Big 5 auditors improve analysts' earnings forecast accuracy and reduce forecast dispersion.

Quality assurance in internal auditing: An analysis of the standards and guidelines implemented by the Institute of Internal Auditors (IIA)

The revised internal auditing standards and practice advisories from the Institute of Internal Auditors (IIA) effectively promote quality assurance in internal auditing, enhancing the profession's reputation.

Effects of Auditing Standards on Auditors Performance

Auditing standards positively impact external auditor's performance, with competency and ability to comply with standards playing a crucial role in their performance.

The Impact Of Auditorâ€™s Independence On Audit Quality: A Theoretical Approach

The more independent an auditor is, the higher the audit quality, as it enables detection of material misstatements, assurance of internal control, and providing going concern warnings.

Management Influence through a Quality Audit Service

Quality audit services provide valuable feedback for internal auditors, enhancing their accountability and effectiveness in delivering quality services.

Quality assurance and effectiveness of audit systems

Quality audits should be effective and reliable, ensuring confidence among stakeholders and improving business performance.

Audit and self‐assessment in quality management: comparison and compatibility

Quality audits and self-assessments are compatible and complementary in quality management, with self-assessments being more beneficial for continuous improvement.

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