The impact of harmonisation by the International Federation of Accountants

Fakhfakh, Hamadi; Fakhfakh, Mondher; Pucheta‐Martínez, María Consuelo

doi:10.1108/02686900810899545

Cited by 12 publications

(8 citation statements)

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“…Auditing standards should consider the linguistic rules to improve the readability of auditing reports. Empirically, several determinants may explain the variability of readability of standardized illustration of audit reports (Fakhfakh, 2013). Among the explanatory variables of this phenomenon, we can consider: the impact of the translation of international standards on auditing, the impact of the modification of the auditor's opinion and the impact of the reform of standards on auditors' reports.…”

Section: Implication Of Results and Final Remarksmentioning

confidence: 99%

“…Audit professionals produce texts that summarize the work of control and audit results. Several empirical studies have shown that the reports of the independent financial auditors are not understood by many readers of the financial statements (Barnett & Leoffler, 1979;Hay, 1998 andFakhfakh, 2013). In addition, accounting research has discussed the problem of expectation gap which results from the misunderstanding of the significance and the direction of the audit opinion formulations.…”

Section: Introductionmentioning

confidence: 98%

“…The number of audit information is a factor explaining the behavior of users of financial statements (managers, owners, employees, institutional investors, financial institutions, government, general mass and media). Investors reacted with understandable reports (Fakhfakh, 2013). The length of audit reports is a sign of informational relevance.…”

Section: Introductionmentioning

confidence: 99%

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The readability of international illustration of auditor's report: An advanced reflection on the compromise between normative principles and linguistic requirements

Fakhfakh

2015

Journal of Economics, Finance and Administrative Science

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Content of audits Understandability Readability and determinants of legibility a b s t r a c tThe independent auditors periodically publish reports that summarize the audit results. These reports reinforce the financial communication and reliability of accounting information. International Standards on Auditing (ISA) determine the content of audit reports and the quality of audit results. Theoretically, the audit standardization must model intelligible and clear reports for readers. Compliance with linguistic principles contributes to the improvement of the structure of audit reports. In practice, the effectiveness of these reports is criticized because users do not understand the audit information. In order to improve the content of audit reports, International Federation of Accountants (IFAC) had revised International Standards on Auditor's report: ISA 700: Forming an opinion and reporting on financial statements. Linguistically, standardized audit reports could be unreadable by many users of financial statements. This article discusses the linguistic problems related to the preparation of reports. This discussion focuses on the audit reports which are illustrated by the International Standards on Auditing. The results show that in the presence of conflicting requirements (auditing standards versus linguistic principles), independent auditors must optimize the presentation of their reports.

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Section: Implication Of Results and Final Remarksmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

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The readability of international illustration of auditor's report: An advanced reflection on the compromise between normative principles and linguistic requirements

Fakhfakh

2015

Journal of Economics, Finance and Administrative Science

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“…Profitability of a company reflects the level of effectiveness achieved by a company's operations. Rationale that the level of profit used as one way to assess the success of the company's effectiveness is of course related to the final result of the company's policies and decisions that have been implemented by the company in the current period (Fakhfakh: 2013a).…”

Section: Literature Reviewmentioning

confidence: 99%

Effect of Financial Reports on Public Companies Listed in Indonesia Stock Exchange

Lara¹

2018

RJOAS

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The purpose of this research is to know empirical evidence of several factors affecting Audit Delay. Formulated research problem that is how influence of problematic of transmission of information of company financial report, profitability, solvency, and auditor opinion influence audit delay and added value at property company listed in Indonesia Stock Exchange (IDX). Audit delay is an important issue as it affects the timeliness of the release of the transmission of accounting information. The factors that will be tested in this research are company size, profitability, solvency, and auditor opinion. The population of this study is a property company listed on the Indonesia Stock Exchange period 2014-2016. The results show that the audit delay is between 25 days to 121 days with an average of 77.73 days and a standard deviation of 14,343. It appears that the average audit delay of the sample companies is still below 90 calendar days which is the limit set by the Financial Services Authority (FSA) in the submission of the financial statements of March 31 of each year. It also appears that there are companies that are late because they have audit delay over 90 days. The lowest Return On Asset (ROA) is owned by PT New Century Development Tbk in 2014, while the highest ROA occurs in 2015 at PT Metropolitan Kentjana Tbk. The Debt to Equity Ratio variable has a minimum value of -2.904703 and a maximum value of 2,466707 with an average of 0.793721 of the sample number of 111. The lowest solvency ratio is owned by PT New Century Development in 2015, while the highest ratio is at PT. Duta Anggada Realty in 2016.

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“…Another study focussed on the readability of standardized reports by the IFAC was conducted by Fakhfakh (2013). The purpose of this research is to examine the readability of reports which have been standardized by three ISAs (ISA 700, ISA 705 and ISA 706).…”

Section: Ara 241mentioning

confidence: 99%

Linguistic performance and legibility of auditors’ reports with modified opinions

Fakhfakh

2016

Asian Review of Accounting

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Purpose – The purpose of this paper is to measure the understandability of the illustrations provided by the International Federation of Accountants in terms of the structural features of international auditors’ reports with modified opinions. Design/methodology/approach – Measurement of the legibility of reports illustrated by the revised ISA 705 and ISA 706. This paper discusses the compliance level of modified auditors’ reports with the linguistic rules. Findings – It was found that the standardized illustrations of modified reports are not fully understandable by users of financial statements. The illustrations of modified auditors’ reports are not compliant with several linguistic rules. Originality/value – This paper provides new original investigation about the linguistic features of illustrations provided by the ISA 705 and ISA 706. This paper discusses the level of unintelligibility of standardized auditors’ reports and the implications for stakeholders.

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The impact of harmonisation by the International Federation of Accountants

Cited by 12 publications

References 12 publications

The readability of international illustration of auditor's report: An advanced reflection on the compromise between normative principles and linguistic requirements

The readability of international illustration of auditor's report: An advanced reflection on the compromise between normative principles and linguistic requirements

Effect of Financial Reports on Public Companies Listed in Indonesia Stock Exchange

Linguistic performance and legibility of auditors’ reports with modified opinions

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