• Title/Summary/Keyword: Audit quality

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A study on non-audit Service and Audit Quality: focused on the Comparison between Big4 and Non-Big4 Audit Firm (비감사서비스와 감사품질에 관한 연구: Big4와 Non-Big4 회계법인 비교를 중심으로)

  • Lim, Hyoung-Joo
    • The Journal of the Korea Contents Association
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    • v.15 no.7
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    • pp.477-488
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    • 2015
  • This study investigates the association between non-audit services and audit quality, using a sample of firms in which audit services and non-audit services are provided by a same audit firm. This study extends previous studies by separating auditors into Big4 and Non-Big4 audit firms as each group may have different incentives to impair their independence. According to the empirical results, audit quality, proxied by absolute value of discretionary accruals has significant negative association with non-audit service fee for Non-Big4 audit firms, but not for Big4 audit firms, suggesting that Non-Big4 audit firms may impair their independence with increased non-audit service fees. Non-Big4 audit firms are known to be relatively small and local firms that might be highly economically dependent upon a specific client firm whereas Big4 audit firms are not. This results may be of interest to regulators and capital market investors and standard setters who concern a recent trend of increasing non-audit services that are provided by an audit firm which also provides audit service at the same time.

Applying a Quantitative Model on Information System Security Audit Evaluation for Improving Auditing Quality (정보시스템 감리품질향상을 위한 보안감리평가에의 정량화모델 적용 연구)

  • 김동수;김현수
    • Journal of Information Technology Applications and Management
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    • v.11 no.2
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    • pp.45-64
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    • 2004
  • Many researchers have proved that information systems auditing is a very effective tool for improving information systems quality. However, information system auditing in Korea still includes many subjective judgements. This study deals with applying a quantitative model to improve information system auditing quality on security domain. First of all, we have looked at previous researches on information systems audit, especially on security audit. Based on this survey, we have come up with solutions to improve the evaluation efficiency on security audit. We have merged the security audit guidelines of NCA and KISA, and developed a quantified evaluation scheme. We have proved the validity of this model by interviews with experts and by case studies.

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An Exploratory Study on the IS Audit's Effectiveness Determination between Interest Groups (정보시스템 감리 이해집단별 감리효과 결정요인에 관한 탐색적 연구)

  • Choi, YoungJin;Jung, YongKyu;Ra, JongHei
    • Korean Management Science Review
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    • v.34 no.2
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    • pp.115-123
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    • 2017
  • IS audit has been regarded as contributing to the improvement of the quality of information Systems, recently, it has been argued that it is not possible to expect a effectiveness, because it can offset the schedule burden due to the preparation of additional documents for Audit and it affect to the project schedule. The effectiveness and quality criteria of IS audit are different between groups, because IS audit is responsible for checking the results and process of the developer company. In this study, we modeled between IS effectiveness and auditor competence, audit firm competence, IS audit standards. As a result, it was concluded that auditor competence, audit firm competence, IS audit standards have a positive effect on IS audit effectiveness. However, according to the result of comparing between interest groups, audit firm competence and audit standards were significant in auditor group, but audit standard was significant in requesting organization and developing company thought that auditor was a important factor to audit effectiveness.

The Relationship Between Three-Level Review System and Audit Quality: Empirical Evidence from China

  • TANG, Kai;YAN, Sibei;BAE, Khee Su
    • The Journal of Asian Finance, Economics and Business
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    • v.9 no.5
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    • pp.135-145
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    • 2022
  • To improve audit quality, certain Chinese auditing firms have added a third-level review by an additional signing auditor to the general evaluation by a signing auditor team consisting of an engagement auditor and a partner. Nonetheless, our research-based on 36,033 firm-year observations from 2004 to 2019 reveals that compared to the general review system, auditor teams under the three-level review system are less likely to issue modified audit opinions when abnormal financial conditions arise. This finding suggests that, while larger auditor teams' knowledge, experience, and information advantages can theoretically sharpen their judgment, their performance is more susceptible to interference from divergent opinions, the diffusion of responsibility, and lower energy invested by individual auditors, ultimately impairing their judgment regarding the audited enterprises' abnormal financial conditions. That is, the three-level review system, which aims to improve audit quality, actually worsens audit quality. This conclusion remains valid after the problems of heteroscedasticity and endogeneity are addressed by using firm-level cluster robust standard errors and two-stage regression. We hope that our research will draw the attention of auditing firms, prompting them to reconsider the rationality of the three-level review system.

A Study on the Scheme of Information System Audit for Institute of Knowledge Information (지식정보 관리기관을 위한 정보시스템 감리 추진방안에 관한 연구)

  • Lee, Sang-Jun;Ra, Jong-Hei;Go, Hyung-Dae;Shin, Ki-Jung
    • Journal of Information Technology Services
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    • v.5 no.3
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    • pp.121-135
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    • 2006
  • With the growth and maturation of IT industry, the necessity of audit about development, maintenance and management of high-quality information system is gradually increasing. In addition, the necessity of inner auditing system, which could totally verify and evaluate the effectiveness of project according to the characteristics of organization conducting information-oriented business, also being proposed. Government offices including Korea Institute of Science and Technology(KISTI) collectively controlling nationwide science-technology related information have no guiding principle or organization within themselves even though performing information-oriented businesses are becoming more bigger and complicated. In this paper, we propose scheme for devising framework, which can audit construction and operation of knowledge information, check list and guideline. In addition, we present concrete ways for adapting these schemes to institutes which manage science-technology knowledge information. Audit framework consists of points of time in audit, audit domain and audit criterion. Points of time in audit are defined as three phases as followings: pre-audit, in-progress audit and post-audit. Audit domain includes 16 detail audit domains and especially we set 11 check items and 40 detail investigation items for database implementation business. We expect that management level of science-technology implementation business of organizations using this research result will increase and they could offer high-quality information service.

The Impact of Audit Characteristics on Firm Performance: An Empirical Study from an Emerging Economy

  • Rahman, Md. Musfiqur;Meah, Mohammad Rajon;Chaudhory, Nasir Uddin
    • The Journal of Asian Finance, Economics and Business
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    • v.6 no.1
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    • pp.59-69
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    • 2019
  • The auditor, an important instrument of corporate governance, ensures the transparency and accountability of the firm to the stakeholders. The objective of this paper is to explore the impact of audit characteristics on firm performance. In this study, external audit quality (BIG4), frequencies of audit committee meetings, and audit committee size are used as the proxies of audit characteristics and firm performance is measured through ROA, profit margin and EPS. A total of 503 firm years are considered as sample size from the listed manufacturing firms of Dhaka Stock Exchange (DSE) during the period of 2013 to 2017 to find out the impact of audit characteristics on firm performance. In this study, multivariate regression analysis is conducted using the pooled OLS method. Moreover, time dummy and lag model of multivariate analysis are also analyzed as robust check. The multivariate regression results find that external audit quality (BIG4) and audit committee size are significantly positively associated with firm performance. This study also finds that there is a significant negative relationship between audit committee meeting and firm performance. This study recommends that the regulatory authority and audit committee should review the frequencies of audit committee meeting to make it more effective to ensure better firm performance.

A Quantitative Method for Quality Improvement of Information System Audit Evaluation (정보시스템 감리평가 품질 향상을 위한 정량화 방법)

  • Lee, Ki-Young;Kim, Young-Ho;Han, Ki-Joon
    • Journal of the Korea Society of Computer and Information
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    • v.17 no.4
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    • pp.173-184
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    • 2012
  • As a result of the compulsory of information system audit and a rise in audit demand, the quality improvement of information system audit is being emphasized. However, since the current information system audit heavily depends on the auditor's experience, skill, and subjective judgments, it incurs distrust in the objectivity and reliability of audit results from audit interest person. Furthermore, so far research activities aimed at securing the objectivity and reliability of audits have not been adequately carried out. Therefore, this paper presents a quantitative method for information system audit evaluation in order to contribute to the quality improvement of overall information system audit through securing compliance, objectivity, and reliability of information system audit. The quantitative method is largely composed of two sectors, such as evaluation areas and items, scores calculation for evaluation items, and can generally apply the information system audit standard to information system audit evaluation.

Quality Audit for Measuring the Effectiveness of Quality Management Systems (品質經營體制의 有效性 評價를 위한 效率的인 品質監査의 遂行方案)

  • Nam, Ji-Hee;Kim, Kwan-Hyun;Cho, Moon-Sung;Lim, Nam-Jin
    • Journal of Korean Society for Quality Management
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    • v.28 no.2
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    • pp.252-263
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    • 2000
  • The purport of quality assurance audit and its procedures as specified in ISO 9000 have been reviewed. The principles and techniques for interview, documentation of the results and quality trend analysis were discussed. The practical techniques for the performance of quality audit for measuring the effectiveness of quality management systems were suggested.

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Audit Review and Earnings Response Coefficient (감사보고서 감리와 이익반응계수)

  • Shin, Yong-Jae;Ko, Byung-Seok
    • Journal of Industrial Convergence
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    • v.3 no.2
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    • pp.29-50
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    • 2005
  • Audit review is the system to review the audit procedures performed and the audit opinion expressed by the independent auditors. The public audit review performed by Financial Supervisory Service (FSS) is regarded as one of the most important means to maintain the reliability of accounting information in Korea. We examinate the effect of audit review on earnings quality by using ERC (earnings response coefficient). We find that ERC of the sample group which issued the audit error reports after they were reviewed by SSB is more effective and higher than one of the non-reviewed group, matching group. We infer that the audit review system has the effectiveness in Korea.

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An Analysis of the Effects of Knowledge Complementarities on the Performance of Information System Audit : A Perspective of the Resident Audit in the Project Office (지식상호보완성이 정보시스템 감리 성과에 미치는 영향 : 상주감리 관점에서)

  • Jang, Ji Yeon;Kim, Choong Nyoung
    • Journal of Information Technology Services
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    • v.15 no.1
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    • pp.113-129
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    • 2016
  • Recently, as Information System projects tend to be more complex, the importance of Information System Audit increases. In the same context, the need for the resident IS Audit also increases, which is supposed to deal with the possible risks and urgent issues by providing the appropriate support and timely coordination during IS project. Basically, for the effective IS Audit, the IS audit team members should be able to understand such a business context as work characteristics, business knowledge, goals, and culture of the organization. The audit team members should also be able to share the various knowledge of Information Technology and audit procedure with the owner of the project. Especially, for the resident audit, it is more important to fill the gaps in expertise between project owner and audit team. However, any studies on the need of common knowledge base (knowledge complementarities) in the IS audit have not been done so far. The purpose of this study is to analyze whether the knowledge complementarity based on inter-organizational communication between the project owner and audit team members makes an effect on the fidelity and performance of IS audit. In order to do this, the relationship among inter-organizational communication and knowledge complementarity, the fidelity of IS audit service, and performance of IS audit has been analyzed, using Structural Equation Model. The result shows that all the relationship is significant, which means that knowledge complementarity between the two different interest groups should be an effective factor on the fidelity and performance of IS audit. This result implies that, for better quality of IS Audit service, how to acquire the knowledge complementarity between the project owner and Audit team should be considered seriously as well as systematically in the process of IS Audit.