Effect of audit firm industry specialization on cost of debt financing: Evidence from Ghana

Yeboah, Ebenezer Nana; Zhang, Yang; Arthur, Benedict; Kyeremeh, Gabriel

doi:10.1080/23311975.2023.2175439

Cited by 1 publication

(2 citation statements)

References 21 publications

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“…Firms with industry specialization have more expertise and experience in assessing the unique risks associated with that sector, leading to a more thorough and effective business risk audit approach (Chandra, 2022). Specialized firms may also have access to specialized tools and resources, allowing them to gather and analyze relevant data more efficiently (Ebenezer et al, 2023). On the other hand, audit firms lacking specialization in a certain area may struggle to identify all potential risks for their clients, resulting in an incomplete or inadequate assessment (Afsaneh, 2022).…”

Section: H1: There Is No Effect Of the Size Of The Audit Firm On The ...mentioning

confidence: 99%

“…Audit firms that emphasize their expertise in relevant areas to their clients' operations have an advantage. For example, Petrov and Stocken found that specialist auditors in industries with correlated firm values benefit from information spillovers between clients, leading to lower expected fees and higher audit reporting quality (Ebenezer et al, 2023). Additionally, Yeboah et al found that audit firm industry specialization reduces the cost of debt for businesses, as specialized auditors are more likely to detect questionable accounting practices and report errors (Sergey & Eremin, 2023).…”

Section: H1: There Is No Effect Of the Size Of The Audit Firm On The ...mentioning

confidence: 99%

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The Effect of the Characteristics of the Audit Firm and Client on the Application of the Business Risk Audit Approach

Hobaishi,

Sharabi,

Mehgani

et al. 2024

EJAAFR

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The purpose of this study is to identify the impact of certain fundamental characteristics of audit firms and their clients on the application of the business risk audit approach in Yemen, as well as to identify the responses implemented by these firms and companies to these characteristics. The study uses a descriptive-analytical approach, where the data collected through the questionnaire are described and analyzed using appropriate statistical methods. The study sample included 60 auditors from 42 audit firms and 8 individual offices, with a focus on larger offices and those associated with international audit offices, as they are more likely to apply the business risk-based audit approach. Data was sourced from the Ministry of Industry and Trade’s publications on licensed audit offices. Out of 50 electronic and 10 paper questionnaires distributed, 38 responses were received, representing a response rate of 63.33%. The results showed that the characteristics related to the audit firm have a varying impact on the application of the business risk audit approach and that the specialization of the audit firm in the client's business is the most influential factor in this regard. The results also showed that the characteristics related to audit clients do not affect the application of the business risk audit approach, indicating the existence of other factors that may affect this approach. This study is one of the few studies that address the application of the business risk audit approach in the Yemeni context, highlighting the factors affecting this application and its challenges. The study also provides some recommendations to improve audit quality and deal with business risks.

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Section: H1: There Is No Effect Of the Size Of The Audit Firm On The ...mentioning

confidence: 99%

Section: H1: There Is No Effect Of the Size Of The Audit Firm On The ...mentioning

confidence: 99%

The Effect of the Characteristics of the Audit Firm and Client on the Application of the Business Risk Audit Approach

Hobaishi,

Sharabi,

Mehgani

et al. 2024

EJAAFR

View full text Add to dashboard Cite

show abstract

Effect of audit firm industry specialization on cost of debt financing: Evidence from Ghana

Cited by 1 publication

References 21 publications

The Effect of the Characteristics of the Audit Firm and Client on the Application of the Business Risk Audit Approach

The Effect of the Characteristics of the Audit Firm and Client on the Application of the Business Risk Audit Approach

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