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- Publisher Website: 10.2308/accr-52389
- Scopus: eid_2-s2.0-85076154521
- WOS: WOS:000497991100008
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Article: Auditing standards, professional judgment, and audit quality
Title | Auditing standards, professional judgment, and audit quality |
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Authors | |
Keywords | Audit quality Professional judgment Compliance mentality Auditing standards Audit fee |
Issue Date | 2019 |
Citation | Accounting Review, 2019, v. 94, n. 6, p. 201-225 How to Cite? |
Abstract | © 2019 American Accounting Association. All rights reserved. We propose a model to study how auditing standards affect audit quality. We posit that both auditors’ incentives and expertise are relevant for audit effectiveness. Auditing standards are useful in mitigating the auditors’ possible misalignment of interest with investors. However, auditing standards also restrict auditors’ exercise of professional judgment, which, in turn, leads to compliance mentality and reduces auditors’ incentives to become competent in the first place. We identify the conditions under which stricter auditing standards increase or decrease audit quality. Moreover, stricter auditing standards always increase audit fees, but can benefit auditors at firms’ expense. The model also generates many testable empirical predictions. |
Persistent Identifier | http://hdl.handle.net/10722/285853 |
ISSN | 2023 Impact Factor: 4.4 2023 SCImago Journal Rankings: 4.640 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Gao, Pingyang | - |
dc.contributor.author | Zhang, Gaoqing | - |
dc.date.accessioned | 2020-08-18T04:56:49Z | - |
dc.date.available | 2020-08-18T04:56:49Z | - |
dc.date.issued | 2019 | - |
dc.identifier.citation | Accounting Review, 2019, v. 94, n. 6, p. 201-225 | - |
dc.identifier.issn | 0001-4826 | - |
dc.identifier.uri | http://hdl.handle.net/10722/285853 | - |
dc.description.abstract | © 2019 American Accounting Association. All rights reserved. We propose a model to study how auditing standards affect audit quality. We posit that both auditors’ incentives and expertise are relevant for audit effectiveness. Auditing standards are useful in mitigating the auditors’ possible misalignment of interest with investors. However, auditing standards also restrict auditors’ exercise of professional judgment, which, in turn, leads to compliance mentality and reduces auditors’ incentives to become competent in the first place. We identify the conditions under which stricter auditing standards increase or decrease audit quality. Moreover, stricter auditing standards always increase audit fees, but can benefit auditors at firms’ expense. The model also generates many testable empirical predictions. | - |
dc.language | eng | - |
dc.relation.ispartof | Accounting Review | - |
dc.subject | Audit quality | - |
dc.subject | Professional judgment | - |
dc.subject | Compliance mentality | - |
dc.subject | Auditing standards | - |
dc.subject | Audit fee | - |
dc.title | Auditing standards, professional judgment, and audit quality | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.2308/accr-52389 | - |
dc.identifier.scopus | eid_2-s2.0-85076154521 | - |
dc.identifier.volume | 94 | - |
dc.identifier.issue | 6 | - |
dc.identifier.spage | 201 | - |
dc.identifier.epage | 225 | - |
dc.identifier.isi | WOS:000497991100008 | - |
dc.identifier.issnl | 0001-4826 | - |