In auditor we trust: 44 years of research on the auditor-client relationship and future research directions

Mustikarini, Arizona; Adhariani, Desi

doi:10.1108/medar-11-2020-1062

Cited by 21 publications

(14 citation statements)

References 117 publications

(160 reference statements)

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“…This study adopts a structured literature review applying a hybrid method that combines bibliometric and content analysis techniques (Paul and Criado, 2020; Mustikarini and Adhariani, 2021). The content analysis is a research methodology used to make conclusions from raw data to present knowledge, novel insights, interpretation of facts and a partial guide to action (Mayring, 2000).…”

Section: Methodsmentioning

confidence: 99%

Wave after wave: unboxing 40 years of auditing ethics research

Mardawi

Seguí‐Mas

Tormo‐Carbó

2023

MEDAR

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Purpose To the best of the authors' knowledge, this is the first study that aims to present a comprehensive view of the auditing ethics literature by unboxing 40 years of efforts in the field. Design/methodology/approach This study combined bibliometric, social network and content analysis by analyzing 114 articles published in accounting and top business ethics journals on the Web of Science database from 1980 to 2021. Findings The results show a rising interest in this topic and reveal auditors’ ethical decision-making and moral reasoning as the most discussed topics in the literature. The work also clusters the literature according to keywords and scopes, identifying literature gaps and suggesting new avenues for future research. Practical implications The research results assist provide an overarching image of the auditing ethics field. In addition, these results draw possible future avenues to bridge the void in the current auditing ethics literature by presenting indispensable directions for potential research. For example, future research could pay more attention to whistleblowing, fraud, personal auditor characteristics, auditor ethical sensitivity, auditor ethical conflict, ethical climate and underreporting of time. Moreover, the rapidly changing business environment necessitates the auditing ethics research to move to more practical implications to mitigate previous mistakes and avoid any future risks. Originality/value All crises are an ideal breeding ground to motivate fraud and audit failures. In fact, auditing ethics research has been subordinated to the different economic crises. However, despite increasing awareness of the topic’s relevance, no comprehensive study focuses on auditing ethics literature. Now, the devastating effects of the COVID-19 crisis are producing a new wave of financial distresses and avoiding former mistakes is timelier than ever. With this novel and integrated approach, this work goes one step forward, developing a comprehensive picture of the auditing ethics literature.

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Section: Methodsmentioning

confidence: 99%

Wave after wave: unboxing 40 years of auditing ethics research

Mardawi

Seguí‐Mas

Tormo‐Carbó

2023

MEDAR

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“…Specifically, this paper answers whether and why auditor choice and audit quality vary across life-cycle stages. This interaction has received scant attention in the literature (Habib and Hasan, 2019; Hay, 2015; Mustikarini and Adhariani, 2021). To the best of our knowledge, papers that study audit quality and auditor selection (Jacob et al , 2019) do not use life-cycle stage interaction.…”

Section: Literature Reviewmentioning

confidence: 99%

Big-4 auditors and audit quality: a novel firm life-cycle approach

Jain

Agarwalla

2022

MEDAR

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Purpose Firm-specific factors such as size, profitability, growth, risk and complexity, in addition to agency-related issues determine both auditor selection and firm life-cycle stage. This paper aims to examine whether and how the effect of Big-4 auditors (B4As) on client firms’ audit quality varies across firms’ life-cycle stages. Design/methodology/approach The sample comprises 1,813 firm-year observations in India’s emerging economy from 2011 to 2020. The Modified Jones model and Jones (signed, unsigned) model are used to compute discretionary accruals/audit quality. The authors use Koh et al.’s (2015) methodology to determine the firm life cycle. Findings The authors’ key findings show that the client firms employing B4As have superior audit quality than those employing non-Big-4 auditors (NB4As). The authors also show that the life-cycle stage significantly impacts the relationship between B4As and a firm’s audit quality. Furthermore, B4A client firms report superior audit quality vis-à-vis NB4A firms only in the birth- and decline-stages. The audit quality of growth- and mature-stage B4A and NB4A client firms is not significantly different. Practical implications Implications for managers include the decision to hire B4As. Given that B4As earn a significant fee premium, managers leading birth- and decline-stage firms should hire B4As, while managers of growth- and mature-stage firms should not. Originality/value To the best of the authors’ knowledge, this is the first paper to examine the moderating effect of the firm life-cycle stage on the selection of B4As and their impact on audit quality.

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“…In addition, during the audit, familiarity may arise due to the long-term or close relationship between the auditors and the clients. Recent studies discovered that this relationship affects the independence of auditors (Adams et al, 2021;Mustikarini & Adhariani, 2021;Quick & Warming-Rasmussen, 2015;Ye, Carson, & Simnett, 2011). However, there are opposing studies that suggest otherwise (Mautz & Sharaf, 1961).…”

Section: (Ii) Environment Of Audit Companymentioning

confidence: 99%

“…Currently, There are many studies on the auditor independence with different approaches in each specific context such as economic approach (Adams, Krishnan, & Krishnan, 2021;DeAngelo, 1981;Geiger, North, & O'Connell, 2005) behavioral approach (Goldman & Barlev, 1974;Mustikarini & Adhariani, 2021) access to risk (Hao, 2021;Johnstone, Warfield, & Sutton, 2001;Turner, Mock, & Srivastava, 2002) framework approach (Bakar, Rahman, & Rashid, 2005;Beattie, Brandt, & Fearnley, 1998;Hoang, Thuong, Minh Duc, & Hoang Yen, 2019;Ndaba, Harber, & Maroun, 2021). However, based on the review results in the research period, there are no studies on the auditor independence from the perspective of international economic integration promote enhancement of auditor independence.…”

Section: Introductionmentioning

confidence: 99%

Enhancing Auditor Independence in Developing Countries in Context of Globalization – Evidence in Vietnam

Duc

2021

102

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Purpose: Globalization brings many opportunities and challenges for developing countries. So, does globalization create a motivation to improve the auditing profession's ethics? Independence is one of the most important components of auditing professional ethics, which must be maintained throughout the audit process. This article delivers a full insight into identifying factors that enhance the auditor independence promoted in the international integration process. Design/methodology/approach: This article approached from international integration process that affect auditor independence from auditors’ awareness, working environment and professional association. This article used a mixed approach based on the experimental methodology. This article used the archival research method and group discussions method to analyze and assess the research problems and verified by experimental data. The article took the group discussions with experts and survey 280 directors, auditors, auditor assistants who are working in 70 auditing firms. Findings: The results showed that globalization support auditors, audit firms, and professional Association to improve auditor independence. Especially, the factors that enhance the auditor independence driven by international integration: Knowledge, Technology, Competition, Management, Monitoring. Practical implications: The article implied to improve auditor independence in the context that Vietnam is strongly integrating internationally. Originality/value: The article has taken a new approach on auditor independence from globalization in Vietnam.

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In auditor we trust: 44 years of research on the auditor-client relationship and future research directions

Cited by 21 publications

References 117 publications

Wave after wave: unboxing 40 years of auditing ethics research

Wave after wave: unboxing 40 years of auditing ethics research

Big-4 auditors and audit quality: a novel firm life-cycle approach

Enhancing Auditor Independence in Developing Countries in Context of Globalization – Evidence in Vietnam

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