Audit practice and audit performance of CPAS in Thailand.

Author:Ussahawanitchakit, Phapruke
Position:Report
 
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  1. INTRODUCTION

    Recently, auditors have become significant professionals who encourage stakeholders to ensure and accept the quality and reliability of financial statements and reports. The related practices, duties, functions, and activities have been investigated in several perspectives, such as role stress that is linked to job satisfaction, job outcomes, and job performance (Burney and Wideney, 2007). Particularly, auditors investigate the advantages and benefits of firms' financial information in all activities by auditing any business transaction through the implementation of accounting and auditing standards, and other related regulations, rules, and laws. Then, auditors' experience, independence, and professionalism have influenced their audit performance, audit quality, audit effectiveness, audit success, audit sustainability, and audit survival in the competitive markets and environments.

    Interestingly, audit practice is a main driver of explaining and determining audit performance. It refers to auditors' performing their duties, functions, activities, and responsibilities in order to improve the reliability of financial reporting. It includes audit experience, audit independence, and audit professionalism. First, audit experience is an auditor' unique knowledge, competencies and capabilities that occur from job practices in auditing profession and help process information, make metal comparisons of alternative solutions, and initiate subsequent actions (Chung and Monroe, 2000). Second, audit independence is a judicial impartiality that recognizes an obligation for fairness not only to management and owners of a business but also to creditors and those who may otherwise rely upon the independent auditors' reports (Roberts, 2010). Third, audit professionalism is a preference by exercising individual professional judgment in undertaking auditing tasks via the maintenance, sustainability and survival of professional self-regulations and self-forces (Askary, 2006). For the outcomes of audit experience, audit independence, and audit professionalism, audit performance is a result of these constructs. It refers to an outcome of auditors' performing their duties, functions, and responsibilities that relate to accounting and auditing standards and regulations. It consists of audit quality and audit effectiveness. Accordingly, the empirical investigation of the aforementioned research relationships is indispensable.

    Here, this study aims at examining the influences of audit practice on audit performance of certified public accountants (CPAs) in Thailand. Audit practice includes audit experience, audit independence, and audit professionalism; audit performance consists of audit quality and audit effectiveness. The key research question is how audit practice has an influence on audit performance. The specific research questions are: (1) how audit experience, audit independence, and audit professionalism have an impact on audit performance, (2) audit experience, audit independence, and audit professionalism have an effect on audit quality, and (3) audit experience, audit independence, and audit professionalism have an influence on audit effectiveness.

    This study is outlined as follows. Literature review of audit practice, audit experience, audit independence, audit professionalism, audit performance, audit quality, and audit effectiveness is addressed and examined, and significant research hypotheses developments are presented. Next, the research methods used to test the hypotheses are discussed including sample selection and data collection procedure, variables and methods. The results of the study derived from 214 certified public accountants (CPAs) in Thailand are indicated and their reasonable discussions with existing literature supports are showed. Lastly, the study concludes by discussing implications for theories and practices, identifying limitations of the study, and providing suggestions and directions for future research.

  2. LITERATURE REVIEWS AND RESEARCH HYPOTHESES DEVELOPMENTS

    In the interest of the audit practice-audit performance relationships, audit practice (audit practice, audit experience, audit independence, and audit professionalism) is an independent variable of the study. Audit performance (audit quality and audit effectiveness) is a dependent variable of the study. To distinctively examine these relationships, the conceptual, linkage, and research model presents the relationships among audit practice, audit experience, audit independence, audit professionalism, audit quality, and audit effectiveness, as shown in Figure 1.

    [FIGURE 1 OMITTED]

    Audit practice is a key driver of explaining and determining audit performance. It is defined as auditors' performing their duties, functions, activities, and responsibilities in order to improve the reliability of financial reporting. In this study, audit practice is proposed to become an independent variable of the research relationships. It includes audit experience, audit independence, and audit professionalism.

    2.1 Audit Experience

    Audit experience refers to an auditor' unique knowledge, competencies and capabilities that occur from job practices in auditing profession and help process information, make metal comparisons of alternative solutions, and initiate subsequent actions (Chung and Monroe, 2000). It has an effect on decision making efficiency and effectiveness through a good memory of information necessary and an accurate judgment of audit tasks. Auditors with great experience are likely to improve their judgments with more complete and complex classifications of risk assessments (Stone and Dilla, 1994). They attempt to build and develop the consistency and consensus of risk judgments, assessments, and evaluations in auditing practices under other conditions, situations, and circumstances. Hence, they tend to gain outstanding audit performance through responding clients' needs, expectations, and requirements by being aware of auditing...

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