Audit Quality Perception: Beyond the ‘Role‐Perception Gap’

Abstract

This paper measures differences in the perception of audit quality between professionals, and attempts to categorise the professionals on the basis of their perceptions. We firstly perform a REBUS‐PLS analysis. We thus identify three groups of professionals with different audit quality perceptions. We then run chi‐square tests to evaluate differences in perception depending firstly on the professional's role in the audit process (auditor vs. preparer) and then by incorporating other variables connected with the individuals’ own characteristics. Contrary to existing research, our study reveals no significant differences in perception between auditors and preparers. In contrast, our study indicates that differences in audit quality perception can be explained in particular by the professionals' level of expertise and the existence of shared values among professionals. This study therefore demonstrates the need to look beyond the ‘role‐perception gap’ in order to understand differences in audit quality perception. It confirms the existence of an ‘epistemic community’ that explains the differences in audit quality perception.

An Investigation of Expectation Gap between Independent Auditors and Users from Auditing Services Related to the Quality of Auditing Services Based on Their Role and Professional Features

“…In the hypotheses of this research, investigation of the effective factors on the expectations gap between audit service providers (as independent auditors) and users of audit services (as financial statements suppliers) regarding the factors affecting the quality of audit is proposed. The ineffectiveness of the role of professionals in the audit process in influencing the factors to influence the quality of audit in line with the expectations gap between audit service providers and users of these services, obtained from the present study, are similar to those of Gonthier-Besacier et al (2016). Other professional features of providers and users for audited services are divided into three sub-hypotheses.…”

“…Other professional features of providers and users for audited services are divided into three sub-hypotheses. In the first sub-hypothesis, the professional experience of providers and users of audit services as a factor affecting the expectations gap on the factors affecting the quality of audit has been raised and the results of the research indicate that the hypothesis is not approved and the impact of the individuals' professional experience on creating the expectation gap is different from the research results of Gonthier-Besacier et al (2016). The results of the research show that the size of the audit firms expressed in the second hypothesis is influenced by the expectations of individuals in the field of the audit operations and regulations impact on audit quality.…”

“…Therefore, acceptance of the auditor's recommendations and increasing the efficiency and effectiveness of internal controls lead to appropriate deduction of the client about the quality of audit services (apparent quality), and, on the other hand, it could pave the way for auditors to identify any major distortions in the financial statements. It will also be effective in improving the quality of the audit report of the year or later years (Gonthier-Besacier et al, 2016).…”

“…Such actions and messages include the importance of carrying out the work in accordance with the requirements of professional, legal and regulatory standards, the importance of adherence to the policies and methods of quality control of the institution in accordance with the working conditions, the importance of issuing the auditor's report, the suitability of the circumstances and the fact that quality is necessary for auditing work. The presence of a high level of technical skills and abilities of the audit partner has also been taken into consideration in recent research (Gonthier-Besacier et al, 2016).…”

21st century scandals: towards a risk approach to financial reporting scandals

“…In the professional auditing literature, the expectations gap is a well-established idea. An extensive research literature has documented the existence of audit expectations gaps of one kind or another across a range of countries, mainly by means of comparing differences between auditors and various other parties (investors, managers) in responses to survey questions or by means of experiments (without any pretence to completeness, see for instance, Epstein and Geiger 1994, McEnroe and Martens 2001, Lin and Chen 2004, Nazri Fadzly and Ahmad 2004, Hassink et al 2009, Gonthier-Besacier et al 2016). Yet differences in perceptions of audit quality do not translate easily into estimates of differences in perceptions of financial reporting risk and differences in perceptions also provide limited evidence on the perceived absolute levels of risk.…”