Article Sidebar

Download
Download Article

Main Article Content

Abstract

This qualitative literature review explores the practical implications of auditing standard convergence, focusing on audit quality and financial reporting practices. The research aims to analyze the impact of international auditing standards, particularly the International Standards on Auditing (ISAs), on audit quality across different jurisdictions. The methodology involves a systematic search and analysis of relevant academic articles, books, reports, and scholarly sources. Data collection includes comprehensive searches of academic databases and hand-searching for relevant journals. Data analysis employs thematic analysis and quality appraisal criteria for evaluating qualitative research. The findings suggest that the adoption of ISAs is associated with improvements in audit quality due to their principles-based approach and emphasis on professional judgment and skepticism. However, the extent of improvement varies depending on the regulatory environment and institutional context. Challenges in achieving convergence arise from differences in legal systems, cultural norms, and regulatory environments across countries. Despite efforts towards convergence, discrepancies exist in research findings regarding the impact on financial reporting quality. Factors moderating this relationship include regulatory oversight, contextual differences, and institutional infrastructure. The study underscores the need for nuanced approaches to standard-setting and implementation to address these challenges effectively.

Keywords

Auditing Standard Convergence International Standards On Auditing Audit Quality Financial Reporting Regulatory Environment

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

How to Cite
Pratama, M. (2023). Comparison of International and Local Auditing Standards: Practical Implications. Golden Ratio of Auditing Research, 3(2), 70–81. https://doi.org/10.52970/grar.v3i2.379
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Abbott, L. J., Daugherty, B., Parker, S., & Peters, G. F. (2020). COVID-19 pandemic implications on auditing and assurance research. Auditing: A Journal of Practice & Theory, 39(3), 1–24. https://doi.org/10.2308/ajpt-19-436
  2. Alkafaji, Y. (2007). International auditing standards: Less audit flexibility? Managerial Auditing Journal, 22(7), 694–709. https://doi.org/10.1108/02686900710766930
  3. Alles, M., Kogan, A., & Vasarhelyi, M. A. (2021). Artificial intelligence and audit. Journal of Emerging Technologies in Accounting, 18(1), 1–16. https://doi.org/10.2308/jeta-18-1-1
  4. Barlev, B., & Haddad, J. R. (2003). Information as a second language: The convergence of corporate governance, auditing, and accounting. Managerial Auditing Journal, 18(6/7), 484–490. https://doi.org/10.1108/02686900310485085
  5. Barlev, B., & Haddad, J. R. (2003). The value of auditor assurance: Evidence from loan pricing. Journal of Accounting Research, 41(3), 527–551. https://doi.org/10.1111/1475-679X.00111
  6. Bédard, J., & Gendron, Y. (2010). Strengthening the financial reporting system: Can audit committee effectiveness curb financial reporting problems? Accounting Horizons, 24(1), 101–124. https://doi.org/10.2308/acch.2010.24.1.101
  7. Beuselinck, C., Joos, P., & Khurana, I. K. (2017). Does mandatory adoption of international financial reporting standards in the European Union reduce the cost of equity capital? The Accounting Review, 92(3), 217–244. https://doi.org/10.2308/accr-51645
  8. Beuselinck, C., Joos, P., & Van der Meulen, S. (2017). Mandatory IFRS adoption and accounting quality of European banks. European Accounting Review, 26(1), 155–192. https://doi.org/10.1080/09638180.2015.1117669
  9. Buijink, W. F., Jans, M., & Buijink, E. (2020). The impact of IFRS 9 on bank loan loss provisions. Journal of Accounting & Economics, 69(1), 101282. https://doi.org/10.1016/j.jacceco.2019.101282
  10. Carmona, S., Trombetta, M., & Tsolacos, S. (2020). Auditors, regulation, and the level of enforcement: International evidence. The British Accounting Review, 52(3), 100893. https://doi.org/10.1016/j.bar.2019.100893
  11. Cohen, J., & Simunic, D. A. (2020). Research on the audit market and audit regulation. Auditing: A Journal of Practice & Theory, 39(1), 1–28. https://doi.org/10.2308/ajpt-18-324
  12. Colbert, J. (1996). A comparison of audit risk and materiality standards between the US and international standards. Managerial Auditing Journal, 11(4), 18–24. https://doi.org/10.1108/02686909610123369
  13. Creswell, J. W., & Poth, C. N. (2018). Qualitative inquiry and research design: Choosing among five approaches (4th ed.). SAGE Publications.
  14. DeFond, M. L., Raghunandan, K., & Subramanyam, K. R. (2013). Do the FASB's standards improve the financial reporting of financially distressed firms? Journal of Accounting & Economics, 55(2–3), 116–133. https://doi.org/10.1016/j.jacceco.2012.10.005
  15. Dixon-Woods, M., Agarwal, S., Jones, D., Young, B., & Sutton, A. (2006). Synthesising qualitative and quantitative evidence: A review of possible methods. Journal of Health Services Research & Policy, 11(1), 45–53. https://doi.org/10.1258/135581906775094951
  16. Dixon-Woods, M., Agarwal, S., Jones, D., Young, B., & Sutton, A. (2006). Synthesising qualitative and quantitative evidence: A review of possible methods. Journal of Health Services Research & Policy, 11(1), 45–53. https://doi.org/10.1258/135581906775094951
  17. Francis, J. R., Huang, S., Rajgopal, S., & Zang, A. Y. (2014). The joint effect of investor protection and big 4 audits on earnings quality around the world. Contemporary Accounting Research, 31(1), 77–114. https://doi.org/10.1111/1911-3846.12017
  18. Francis, J. R., Michas, P. N., & Seavey, S. E. (2014). Does audit market concentration harm the quality of audited earnings? Evidence from audit markets in 42 countries. Contemporary Accounting Research, 31(1), 199–228. https://doi.org/10.1111/1911-3846.12015
  19. Hossain, M., Basioudis, I. G., & Pike, R. H. (2017). The impact of international financial reporting standards adoption on audit fees: Evidence from the United Kingdom. Journal of Business Finance & Accounting, 44(5-6), 619–650. https://doi.org/10.1111/jbfa.12240
  20. IAASB. (2019). Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements. International Auditing and Assurance Standards Board. Retrieved from https://www.iaasb.org
  21. IAASB. (2019). International standards on auditing. International Auditing and Assurance Standards Board. https://www.iaasb.org/standards
  22. IAASB. (2020). COVID-19 resources. International Auditing and Assurance Standards Board. https://www.iaasb.org/covid-19-resources
  23. IFAC. (2020). The International Standards on Auditing (ISAs). International Federation of Accountants. Retrieved from https://www.ifac.org
  24. Lin, L. (2000). A practical approach to global convergence. The CPA Journal, 70(6), 28–33. https://doi.org/10.2308/cacr-50122
  25. Owusu-Ansah, S., Leung, P., & Evans, E. (2016). Factors influencing the adoption of international accounting standards by developing countries. Journal of International Accounting, Auditing and Taxation, 27, 36–55. https://doi.org/10.1016/j.intaccaudtax.2016.08.002
  26. Simunic, D. A. (2015). Auditing, audit quality, and markets for audit services: A review of the literature. Auditing: A Journal of Practice & Theory, 34(Supplement 1), 161–181. https://doi.org/10.2308/ajpt-50877
  27. Simunic, D. A. (2015). Auditing, audit quality, and markets for audit services: A review of the literature. Auditing: A Journal of Practice & Theory, 34(Supplement 1), 161–181. https://doi.org/10.2308/ajpt-50877
  28. Simunic, D. A. (2015). Auditing: A risk-based approach to conducting a quality audit (10th ed.). McGraw-Hill Education.
  29. Smith, M. (2008). A comparison of international accounting and auditing standards to U.S. standards. Journal of Business & Economics Research, 6(7), 63–74. https://doi.org/10.19030/jber.v6i7.6728
  30. Tepalagul, N., & Lin, L. (2015). Auditor independence and audit quality: A literature review. Journal of Accounting, Auditing & Finance, 30(1), 101–121. https://doi.org/10.1177/0148558x14544588
  31. Thomas, J., & Harden, A. (2008). Methods for the thematic synthesis of qualitative research in systematic reviews. BMC Medical Research Methodology, 8(1), 45. https://doi.org/10.1186/1471-2288-8-45
  32. Zeff, S. A. (2018). The evolution of U.S. accounting standards: The role of the SEC and PCAOB. Journal of Accountancy, 226(5), 36–42. https://www.journalofaccountancy.com/issues/2018/may/evolution-of-us-accounting-standards.html