Is audit quality impacted by auditor relationships?

Volume 2, Nomor 2, Desember 2016 (Full)

“…Rahmina & Agus (2014) found that in general these three variables positively affected audit quality although audit tenure did not show any statistically significant effect. In contrast, Cahan & Sun (2015) concluded that the audit experience negatively affected the discretionary accruals as the proxy of audit quality, while Ball et al (2015) found a negative relationship between the length of tenure and quality. There is no certain conclusion about capability of auditor.…”

“…Maroun (2014) described the audit quality as auditing standard in audit quality control which was explicitly defined as leadership responsibilities for quality, human resources performance and quality control monitoring/client relationship acceptance and continuance. Ball et al (2015) defined audit quality as the differences and adjustments in the process of implementing International Financial Reporting Standards (IFRS). DeAngelo (1981) characterized the audit output as the independent verification of financial reports associated with quality dimensions.…”

“…Many previous studies also had been proven that the auditor tenure had an effect on the audit quality (Carey & Simnett, 2006;Rahmina & Agus, 2014;Ball et al, 2015). Other studies examined into the specific variables related to audit stakeholder which were auditor and audit subject.…”

“…Different from Ball et al (2015), the proxy for audit tenure in Rahmina & Agus (2014) was the time experience of auditor conducted audits in a company. They concluded that only the auditor's independence and audit fee had significant effect on audit quality, yet an auditor's independence, tenure and fee simultaneously affected audit quality although audit tenure was not significant to the audit quality.…”

“…A Common proxy for audit quality in private institutions is the discretionary accruals that detect inefficient expenses of an audited financial report (Cahan & Sun, 2015;Carey & Simnett, 2006;Wang & Huan, 2015). Most of the studies define audit quality by comparing the difference between actual audit activities and the auditing standards (Ball et al, 2015;Rahmina & Agus, 2014;DeAngelo, 1981).…”