The intent of this article is to supply a literature reappraisal on audit quality and fees. Its offer Many articles show surveies of audit quality and fees and relation between them from 2007 To 2012 in different states. Exemplify the importance of this topic and how Kingdom Bahrain respond to it, and its impact on houses.
The end of audit quality, fees to observe client fiscal study, material misstatement and production of fiscal study.
To Fully sum up all of the research that has been conduct in this field would be impossible. what we do is an effort to supply sum-up of this researches that has taken topographic point on the key subjects which have emerged in term of both the instances of audit fees, audit quality and relation between them.
The First Article
High Audit Fees Impair Audit Quality?
By: Jong-Hag Choi, Jeong-Bon Kim, and Yoonseok Zang, 2010
This survey search whether how audit quality with the absolute accumulations is associated with unnatural audit fees, so there is difference between existent audit fee, expected and normal degree of audit fee The consequences show of assorted arrested developments reveal that the association between the two is asymmetric depending on the grade of the unnatural audit fee
For notices with negative unnatural audit fees, there is no of import relation between audit quality and unnatural audit fee In contrast, unnatural audit fees are negatively related with audit quality for observations with positive unnatural audit fees our consequence propose that hearers ‘ inducements to forestall colored fiscal coverage alteration consistently, depending on whether their clients pay more than or less than the normal degree of audit fee. Our consequences are strong to a scope of sensitiveness cheques.
AUDIT FIRM SIZE, AUDIT FEE AND AUDIT QUALITY
By: Rita Yuniarti, 2011
This reading aims to inspect the deciding factors of audit quality by suggesting the hypothesis that the audit house size ( size populace accounting house ) and audit fees ( audit fees ) have an consequence on the audit quality In this reading, the unit of analysis is the external hearer who has worked in ( Certified Public Accountant ) .
the experimental trial screening that the CPA house size does non extensively affect to scrutinize quality in public accounting house in Bandung, whereas the measure of audits extensively affect to quality of audit and together CPA house size and audit fees do non significantly impact to quality of audit in public accounting house in Bandung..
Suggestion to this reading audit quality should be increase audit fees [ estimation operating cost in audit procedure ] Besides increase employee figure. Furthermore there is other variables outside CPA ( steadfast size, fees ) like single civilization, dysfunctional behaviour.
Audited account fees empirical grounds from emerging economic system.
By: Kamal Naser, Hamed abdullahameed and Rana Nuseibeh, 2007
This survey discuss the audit fees in the emerging economic system. based on research corporate size, position of audit house, industry type, grade of company and hazard the chief determine of audit fees.
Corporate size: Hearers trades with big corporation pass more clip on their transactional audits and pay high to hearers
Status of audit house consequence the quality of corporate study since the audit companies affiliated with large national audit company.
high audit fees result high corporate hazard “ positive relationship ” .
in the other manus the old survey demoing other variables such corporate profitable is public presentation direction, efficiency of apportioning variable resource can be positive or negative relation with audit fees, clip slowdown in comptroller and they use plus placeholder of corporate size besides the figure of employee influence the size of corporation. The alone environment ( political and economic instability ) affect corporation.
THE INFLUENCE OF AUDIT FEE, AUDIT TIME BUDGET PRESSURE AND PUBLIC ACCOUNTANT ATTITUDE
By: Ely Suhayati, 2012
Objects of this survey are the audit fee, audit clip budget force per unit area, public comptroller ‘s attitude, public comptrollers dysfunctional, and audit quality.
The competition between public accounting houses increase competition in commands that consequence the audit fee. Its lead to act upon audit clip budget force per unit area that will do public comptrollers dysfunctional behaviour and attitude in executing the public comptroller responsibilities which consequences low quality.
Our survey consequence is Audit Time Budget Pressure influence comptroller specially an audit in the terminal of the twelvemonth “ really rigorous clip ” so accountant must hold self assurance and positive attitude.
Audit clip Budget force per unit area should be used in most important and effectual manner to increase the work to bring forth high quality. quality reappraisal is really of import factor for the public accounting houses be strong and large.
The Relationship Between Audit Client Satisfaction and Audit Quality Attributes
By: Takiah Mohd. Iskandara, Mohd. Mohid Rahmat B, and Hashanah
This survey hunt for client satisfaction over audit services as perceived by the company direction and its relationships with audit quality attributes the survey between large 4 and not large 4 Audited account companies.
The aim is to obtain client audit quality attribute that related to scrutinize house and audit squad.
This research found that the old survey in the difference in audit quality by size of audit house issue in litigious environment. client focal point on repute of audit house instead than acknowledgment of audit squad. The term of audit squad quality attributes shows “ client felicity is related with audit squad experience is complete the audit in timely mode, independency, ethical, standard and cognition of history and auditing ” . Besides This survey demo us that audit clients concentrate more on the completion of audit work in order to run into the statutory demand instead than the quality of the audit work.
Finally the base of this survey to utilize client satisfaction to reflect audit quality and restriction of this survey is unable to include more capable which may act upon the perceptual experience of hearers.
AN Examination OF AUDIT QUALITY WHEN AUDIT FEE IS LOW
By: Parveen P. Gupta, 2009
This surveies examines whether scrutinizing industry patterns ( bear downing low fees ) which in bend via medias auditor independency and audit quality
Consequence of this survey suggest that audit quality is lower when audit fees less than outlook and frailty versa. Our end of this research to analyze negative audit fees and the step of audit quality and the Prior
survey discover that audit fee is positively associated with hearer type,
client size, amalgamation or acquisition activities, purchase, return on assets, histories receivable and stock list and losingss.
Does compulsory hearer rotary motion better audit quality?
Mara Cameran and Annalisa Prencipe, 2008
This undertaking study the influence of hearer term of office and hearer alteration on audit quality in a alone compulsory audit house rotary motion environment.
The consequence of this survey:
if voluntary alteration of hearer it ‘s an negative signal in compulsory environment. The alteration in compulsory influence audit quality, the survey suggest that hearers need clip to cognize all inside informations of the concern of client so audit quality rise. In this survey they used to type of accumulations: Abnormal Working Capital Accruals and Current Accruals.
This survey found that audit quality is positively related to scrutinize term of office in our compulsory scene. There is a compulsory and voluntary alteration of hearer. the compulsory alterations of hearer tend to follow violent accounting policies but the voluntary tend to be more conventional.
Auditor Independence in a Private Firm Puting
Ole-Kristian Hope and John Christian Langli, 2007
In this survey examined Whether hearer in private house in exchange for retaining client wage more fees for audit and non audit service. Besides This survey look into about relation between audit fees and auditor leaning with audit sentiment.
Audit study aid to happen error and jobs and used like warning for client with auditor sentiment of public presentation of client concern.
The consequence of this survey show, They ca n’t separate between repute or judicial proceeding consequence. possible policy deductions of this survey Regulators ca n’t go through new ordinances fast that might be negative effect and curtailing hearers action. This survey could n’t command all impact between fees and issue of qualified audit sentiments.
Audit quality and the relationship between auditee ‘s bureau jobs and fiscal information quality
By: Johanna Miettinen,
This article examines surveies of audit quality and relationship between audit bureau job and fiscal information quality. Audit quality is positively related with both audit bureau job and fiscal information quality, Besides Audit quality determined by audit fees and non-audit fees but bureau job step by purchase, hard currency flow.
In add-on to the consequence of this article, there is positive relationship between entire fees and purchase besides entire fees with hard currency flow.
Finally this survey supply grounds that scrutinizing is a monitoring tool which Minimize direction to exert discretion over accounting issues.
Difference between the current survey and old surveies:
As we talked earlier on the audit quality and fees and the relation between them positive or negative and how audit quality impair by audit size, figure of employee and single civilization. Besides audit fees impair by industry type, clip spend on audit and reappraisal.
In add-on to that there is other factors influence the quality and fees of audit like criterions, cognition of the squad of audit and repute of the house.
This survey differ than the old surveies that this survey good applied in the Kingdom of Bahrain.
There has been increase and competition between audit houses in Kingdom Bahrain in recent old ages with highest criterion, Laws and ordinances.
The purposes to supply the comprehensive and new categorization of research about the audit quality and fees for functioning clients need.
Based on determination of the empirical survey and development of the atom theoretical account of audit quality and fees, the new surveies proposed wishing to better audit fees and quality in Kingdom Bahrain
To increase quality of fiscal study, information must show classified clearly and without error to understand their significance, ( IASB, 2008 ) .
If fiscal study presented good organized so it will be easier to understand and to happen specific information. Furthermore notes on balance sheet and income statement will supply more account and comprehensibility of gaining figure ( Beretta & A ; Bozzolan, 2004 ) .
Comparison is of import tool that help client to place the similarity and differences between two phenomena, besides it consistency within a company used the same history policies and manufacturers from period to period ( Vincent & A ; Schipper, 2003 ) .
Companies will necessitate to alter opinions, estimation and policies if they found new information or ordinance. For illustration, estimation may alter if they found new available information which encourage reconsideration of expected life clip of certain plus.
In 2005 new set of regulations and statute law, so many EU listed companies transformed from Local GAAP to IFRS, It really of import to explicate how these consequence influence the old consequence. IASB, 2006 ;
Even with stable history policies and judgement company need to compare the consequence of different old ages, To acquire better comparison of fiscal describing information.
Furthermore “ Timeliness ” is when information available to determination shapers before it loses the ability to impact determinations, It ‘s besides the clip it take to detect the information.
when analyzing one-year study to quality of information, timelines step by natural logarithm of sum of yearss between twelvemonth terminal and the signature of the hearers ‘ study after twelvemonth terminal is calculated
Auditing criterions admit the happening of audit hazard from the incapacity of hearer to detect all minutess, Audit criterions can cut down the hazard with engage in certain activities. Auditor can cut down the hazard of inaccurate and wrong sentiment in several ways: non cover with hazardous clients, Identify the hazardous country by understand every inside informations of the concern, clip of scrutinizing, warrant efficient reappraisal within the house, increase the employment of qualified staff and some of the fiscal statement non stratification with GAAP. So the wrong hearer sentiment is occur of audit failure or we can state low audit quality, But hearers have several ways to restrict the audit hazard as discussed earlier.
Direct step of audit quality:
Fiscal describing entry with GAAP or IFRS, Its the Auditing Standard, Fieldwork criterion and describe criterion, the Direct step of audit quality. Arezoo Aghaei chadegani,2011
Indirect step of audit quality
* The length of the relationship between client and hearer called “ Auditor term of office ” is influence the objectiveness and designation of misstatements in the fiscal study. The designation of misstatement hazard is in short hearer term of offices while the objectiveness of misstatement for long hearer term of office.
Auditor term of office demand to evaluation because its new on the Public Companies Accounting Oversight Board and may it see as bing active criterions or active function in the auditing. Sometimes long relationship between client and hearer instance a coverage of corporate dirts.
* Industry expertness is really of import to mensurate and identification the misstatement in the fiscal study, high degree of proficient capacity in industry and the specializer of hearer can cut down the ability of error.
Angela M. Woodland,2003
* Size of audit house divided into big and little based on figure of member and client served. Large history house must hold for 3 old ages 10 members of the public comptroller, Mustafa 2009
The Big audit companies is tend to pass more clip for the complex transactional audit, Its observe by public for hardworking public presentation and it expected to bear down high audit fees. Large companies can afford employ expensive employees. Hence, Companies like to work with the Big audit companies that have high fees than the ordinary for the esteemed.
Large companies play in fiscal market to raise financess so it need to use big sized esteemed audit house, serve high quality and credibleness. Large companies have fiscal analyses need to unwrap information in inside informations, so more audit will be helpful. Kamal Naser, Hamed abdullahameed and Rana Nuseibeh 2007
Other survey found that audit size is variable factor to find audit fees through entire assets Matthews & A ; Peel, 2003 ) or gross revenues and entire assets ( Chung & A ; Narasimhan, 2002 ) .
Audited account fees and audit hours are positively related to big public sector organisations because they need to pass independent clip and attempt from hearer to dale with more fiscal statements ( Deis & A ; Giroux, 1996 ) .
* Corporate complexness: Large companies that have many subsidiaries/branches need more clip for look intoing and analyzing fiscal statement to vouch the dependability of amalgamate statements, Besides the subsidiaries/branches must react to the study demand in the states which operate ( Sandara and Patrrick,1996 ) .
The consequence of the assorted degree in materiality of subsidiaries/ subdivisions and the parent company from Variations of fiscal study demands. So they will necessitate to work more with professional employee that would increase audit fee. complex companies need to look into group intra minutess so audit fees expect to increase for hearers ( Chan et 1993 ) .
( Firth, 1997 ) reveal that relationship between organisational complexness and audit fees is weak or non of import.
* Corporate profitableness
* Finally the audit fees direct impact audit quality, Audit fees linked with continuance of clip that worked, It ‘s besides the value of service to clients ( Tia 2008 ) .Audit market competition raised the audit fees and consequence the audit quality ( Jansen and Payne 2005 ) .
so we can state that clip of scrutinizing affect the audit fees.
Abnormal Audit Fees and the Asymmetric Effect on Audit Quality:
when the hearer receive unnatural audit fees, This may let client to coerce on hearer for the engage timeserving net incomes direction, Then hearer loss their repute.
If audit fees is lower than normal, Client should accept substandard of quality study, Because its non profitable for hearer or non great to cover the expected cost.