Does the expertise of outsourced IAF providers affect audit efficiency? Empirical evidence from an emerging market

Purpose This study aims to examine the effect on audit efficiency of outsourced internal audit function (IAF) providers with industry and/or firm-specific expertise. Drawing on relevant studies from external and internal audit literature, the authors assume that such IAF providers are associated with greater audit efficiency as proxied by audit report lag and audit fees. Design/methodology/approach Based on a sample of firms listed on the Omani capital market during 2005–2019, the pooled regressions are used to test the developed hypotheses. The authors use the market share approach to identify outsourced IAF industry expertise providers and tenure to measure the firm-specific expertise of outsourced IAF providers. Findings The authors find that industry outsourced IAF providers are not associated with shorter audit report lag and lower audit fees. The authors also find that firm-specific expertise outsourced IAF providers are associated with a greater reduction in audit report lag and audit fees. These conclusions are robust under a battery of analyses. The significant contribution of firm-specific expertise outsourced IAF providers to audit efficiency is incremental when abnormal audit report lag and audit fees analysis is conducted. Originality/value The results are the first to attest to the contribution of outsourced IAF with firm-specific expertise. They also show that industry expertise held by outsourced IAF providers does not contribute to audit efficiency.

How has the Change in the Way Auditors Determine the Audit Report Date Changed the Meaning of the Audit Report Date? Implications for Academic Research

Archival research in accounting often relies on the audit report date to capture the constructs of audit efficiency, audit timeliness, audit effort, or audit completion. Auditors' view of what constitutes sufficient appropriate evidence to support the audit opinion, and consequently the date of the audit report, previously coincided with the substantial completion of audit fieldwork, which would be days or weeks before a 10-K filing. However, this view has shifted to coincide with the timing of the public issuance of clients' financial statements (i.e., the 10-K filing date) following several regulatory actions, audit practice changes, and professional standard setting changes occurring since the turn of the century. In this study, we present evidence of this shift in auditor perspective and discuss implications for academic research and standard setting.

How internal audit can champion continuous monitoring in a business operation via visual reporting and overcome barriers to success

Many auditing professionals would contend that continuous monitoring is a function of management and not internal audit. However, effective continuous auditing is highly dependent upon a strong continuous monitoring system. Further, by integrating technology of these two systems, continuous assurance can be achieved, and audit efficiency and effectiveness can be improved through the reduction of costs and effort. This paper discusses how internal audit can collaborate with a business operation to develop a continuous monitoring application utilizing visual reporting and overcome the potential barriers to success. The specific business operation selected for modification was the procurement card program at a large public university. Following an introduction of the scenario, an overview of the ProCard™ program is provided, highlighting the program risks and controls. Third, a four-phased approach used to develop the continuous monitoring tool is described, including specific steps taken to ensure effective use of the real-time data by auditors. Fourth, challenges the internal function encountered when implementing the system are described, including how those challenges were addressed. Fifth, the paper provides concluding comments and future initiatives planned. Finally, the paper provides additional examples for continuous auditing and monitoring and suggests future research topics in this area. Keywords: Continuous auditing, continuous monitoring, visual reporting, internal audit, procurement card.

Audit Partners' Co-Working Experience and Audit Outcomes

We examine whether increases in co-working experience between the lead and concurring audit partners affect engagement audit quality and audit efficiency. We define co-working experience as the lead and concurring audit partners having worked together in these roles on previous audit engagements for clients other than the focal client. A priori, increases in co-working experience could increase or decrease audit quality, but are expected to increase audit efficiency. Using data from Taiwan, where the identities of lead and concurring audit partners are known, we find that co-working experience is positively associated with audit quality and audit efficiency. Further, the effects of co-working experience on audit quality and audit efficiency are more pronounced when co-working experience is more intensive, the two partners are more accessible to each other, the audit firm is less experienced with the client or less knowledgeable about the client's industry, or client audit risks are higher.

The transaction cost analysis and future development of the “blockchain + audit” industry—— based on the analytic hierarchy model and the perspective of industry life cycle

The rise of “blockchain +” has a great impact on all fields and even the whole social and economic situation, and is no exception to the audit work. Blockchain has the characteristics of non-tampering, timestamp, grid consensus and so on, which is in line with the requirements of the audit work to pursue efficiency and effect. Under such a development background, the “blockchain+audit” industry arises from this. The integration of blockchain into audit engagements, in turn, changes the proportion of audit transaction costs. Based on this background, the Analytic Hierarchy Process (AHP) is used to analyze the transaction cost of audit. In view of the problems found in the current transaction cost analysis of “blockchain+audit”, combined with the research on the future development trend based on the theory of technological innovation and industry life cycle, this paper puts forward some suggestions to effectively control the audit cost and improve the audit efficiency. The aim is to provide a practical reference basis for the better application of blockchain technology in auditing.

Research on the Development of CPA Audit from the Perspective of Artificial Intelligence

In the context of the continuous development of Internet technology, big data, Internet of things, cloud computing and other technologies have developed rapidly, and artificial intelligence technology has emerged as the times require. The development of new technologies has promoted social change. As soon as artificial intelligence technology is put forward, it has been widely concerned by the society. Artificial intelligence is like a double-edged sword. As an emerging technology, it is constantly influencing all walks of life, and its application in the field of audit has become the general trend. Under the Background of the rise of artificial intelligence, this paper puts forward the advantages of the combination of artificial intelligence and audit, and analyzes the challenges faced by the development of CPA audit industry, seize the opportunity of the times, actively apply artificial intelligence technology, give practical suggestions for the long-term development of the audit industry, in order to improve the audit efficiency and ensure the audit effect.