Legal Audit Quality and Fraud Risk: The Case of Tunisian Listed Companies

Lajmi, Azhaar; Khiari, Wided; Ouertani, Oumaima

doi:10.46281/ijafr.v6i2.1039

Cited by 4 publications

(3 citation statements)

References 15 publications

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“…After regressing a sample of 5,613 US-listed public firms, they find that firms with higher audit quality have less fraud occurrences. In addition, the study of Lajmi et al (2021) aims to investigate how audit quality influences the probability of account ing fraud in companies listed on the Tunisian stock market from 2014 to 2018. Through logit panel regression analysis, the study demonstrates that two significant factors, namely the audit firm's affiliation with one of the Big audit firm and the rotation of external auditors, play a crucial role in mitigating instances of fraud.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…This demonstrates the effective role that these auditors have played in reducing management opportunism, ensuring compliance with accounting standards, and ultimately helping to create a healthier, more accountable corporate landscape. It's been found before that audit quality raises the quality of accruals (Humayun Kabir et al, 2011) lowers the quality of earnings management and discretionary accruals (Becker et al, 1998;Francis et al, 1999;Imen & Anis, 2021;Lopes, 2018) and increases fraud cases (Chaari et al, 2022;Lajmi et al, 2021).…”

Section: Notementioning

confidence: 99%

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Audit quality and accrual quality: Evidence from Saudi -listed firms

Alduraywish

2024

5002

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This research explores the association between audit quality and accrual quality. Drawing upon the self-interest perspective, previous theories on ownership and management contend that when shareholders are excluded from managerial responsibilities, it grants greater power to management, leading to potential benefits for themselves rather than prioritizing the interests of the business ownership, thereby influencing the firm's performance. The literature preceding this study suggests that auditors play a significant role in mitigating conflicts of interest between management and shareholders. By providing assurance engagement services, auditors positively impact the firm's accruals. This paper posits the hypothesis that clients benefiting from higher audit quality experience fewer agency problems, resulting in improved accrual quality for the firm. To test this hypothesis, the study collects data from the financial reports of non-financial Saudi firms listed on the Saudi Stock Exchange for the fiscal years spanning from 2015 to 2019. The paper employs various regression models, including random effect (RE) and Probit models, to assess accrual quality. Consistent with the expected outcomes, this paper reveals that firms audited by the Big four exhibit an accruals ratio of approximately 27.9% compared to firms audited by non-Big Four auditors. This paper contributes to the body of knowledge by showing the role of audit in the Middle East context in increasing firm’s accruals, and investors can use the findings of this paper in their investment decisions.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Notementioning

confidence: 99%

Audit quality and accrual quality: Evidence from Saudi -listed firms

Alduraywish

2024

5002

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“…Such advantages put external auditors in a great position to suggest useful perspec-tives on best practices in financial reporting and controls, including the mitigation of fraud risks (Zager, Malis & Novak, 2016). In addition, according to the study conducted by Lajmi, Khiari and Ouertani (2021), Big Four auditors reduce the risk of fraud in companies. Some non-Big Four auditors can afford the same quality of audit like their Big Four peers, though (Jacob, Desai & Agarwalla, 2018).…”

Section: Auditor's Relevancementioning

confidence: 99%

Fraud Risk and Audit Quality: The Case of Us Public Firms

Chaari¹,

Belanes

Lajmi³

2022

CJFA

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The study raises questions about the fraud detection technique and the relevance of audit quality to mitigate fraud. The paper suggests a more comprehensive proxy for fraud risk that relies on the combination of Z-score and Beneish M-score. Basing on Logit, regressions are applied to a sample of 5,613 US-listed public firms. The study reveals that the existence of an internal auditor and independent members within the audit committee would potentially reduce the fraud risk. Hiring a Big external auditor and paying it high fees is also helpful. Findings show that, unlike the firm leverage, both firm profitability and growth opportunities have a negative effect of on fraud risk. Leverage provides a motivation for fraudulent financial reporting. It is important to note that this research underscores the audit’s monitoring role to mitigate fraud. Also, the adopted model helps regulators, bankers, managers and auditors to detect fraud at an early stage. So needed action can be taken at suitable time. Finally, in this study, we focus on financially distressed companies rather than those with financial restatements. We suggest a collective tool to predict fraud risk; which is expected to offer a more reliable proxy for fraud risk than do binary models.

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Forensic accounting research around the world

Ozili

2023

JFRA

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Purpose This paper aims to review the relevant forensic accounting research (FAR) around the world and suggests avenues for future research in forensic accounting. Design/methodology/approach The study used the thematic and systematic literature review methodology to analyse the existing literature in FAR. Findings The major thematic areas in the literature are fraud motivation, fraud consequences, fraud detection using forensic accounting techniques, forensic accounting theory, forensic accounting skills, forensic accounting education and forensic accounting jobs. The quantity of FAR is relatively small compared to the quantity of research in other accounting specializations. FAR is well developed in the USA and Canada and is less developed in Europe, Oceania and Asia. There is high interest in FAR in African countries. There is a relatively low global interest in internet information about “forensic accounting research” compared to global interest in other forensic accounting topics. Areas for future research include the role of the environment, digitalization, religiosity and sustainable development in forensic accounting. Practical implications FAR around the world is lopsided, as some regions have more advanced FAR compared to other regions. There is a need for even development of FAR across all regions and a need to publicize the outputs of FAR to a larger audience to increase people’s interest in forensic accounting. Originality/value The study extends the literature by presenting a rigorous thematic and systematic review of the existing literature. It highlights the depth of FAR, the major thematic areas, the benefits of FAR to society and the geographical reach of existing FAR.

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Legal Audit Quality and Fraud Risk: The Case of Tunisian Listed Companies

Cited by 4 publications

References 15 publications

Audit quality and accrual quality: Evidence from Saudi -listed firms

Audit quality and accrual quality: Evidence from Saudi -listed firms

Fraud Risk and Audit Quality: The Case of Us Public Firms

Forensic accounting research around the world

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