نشریه دانش حسابرسی
سال یازدهم شماره 3 (پیاپی 45، زمستان 1390)

This study examines the effect of situational pressures common in the audit environment on opportunistic behavior by individual auditors. It is argued that specific conditions present in audit practice increase perceived personal reputation costs and therefore provide auditors with economic incentives to take actions that might jeopardize the effectiveness of audit evidence acquisition and evaluation process. It examines whether Accountability for previous audit work, and the perception of time pressure, lead auditors to bias their search for evidence away from evidence that disconfirms conclusions reached on the basis of their previous work. In a betweensubjects experiment, auditors assess the extent of reputation concerns associated with encountering disconfirming evidence late in the audit, and the likelihood that such evidence will be suppressed. Results indicate that Accountability for earlier audit work and the presence of time pressure induce reputation concerns when auditors encounter disconfirming evidence late in the audit. Accountability for previous work and time pressure increase the likelihood for suppression of audit evidence.

The purpose of this study is ranking the factors affecting auditing risk with the TOPSIS technique. The population of this study was members of Iranian Association of Certified Public Accountants. These members are included in 4 groups. CPAs that are partner of auditing firms, CPAs that work in Audit Organization of Iran, CPAs that work as the member of audit firms and CPAs that work individually. For ranking factors affecting auditing risk, by conducting archive study and interview with 22 CPAs as a pilot study, 56 factors were identified for inherent risk, control risk and detective risk. These factors were presented in the first questionnaire with five- option Likert spectrum. Factors that their averages were higher than theaverage of the index were selected as the internal factors for the second questionnaire. The number of factors that selected from the first questionnaire was 30 and were presented in paired comparisons situation. Then, second questionnaire was distributed among 4 groups of the Iranian Association of Certified Public Accountants. Consequently, the data from the second questionnaire was analyzed with the TOPSIS technique, and effective factors on auditing risk, were ranked from every 4 groups of the CPAs and for every risk index. The result of this study showed that from viewpoint of the 4 groups of Iranian Association of Certified Public Accountants, factor of “entry and asset adequate protection” with the relative proximity of 0.970 is the most potent factor for decreasing the auditing risk. Also, factors of “accounting systems effectiveness” and “the internal audit unit function” with the relative proximity 0.965 and 0.963 respectively are in the second and third position. These findings indicate that the Audit Organization of Iran must pay attention to risk factors identified by this study and promulgate the special standards relating to audit risk. In addition, auditors, financial managers, internal auditors and Tehran Stock Exchange Market of Iran must encompass the identified risk factors of this study in their professional decision makings.

This paper introduces a method for detecting a special form of Earnings Management called Cosmetic Earnings Management (CEM) in firms’ financial reporting. Recent studies in U.S.A using benford’s law have showed that cosmetic earnings management has occurred before implementation of Sarbanes-Oxley Act 2002 in U.S.A. Using benford’s law, this paper also addresses the occurrence of CEM in the firms listed in Tehran stock exchange (TSE) during 1999 and 2009. To analyze and compare the difference between actual and expected frequencies of profit and loss digits of 363 listed companies, the Standard Z and Chi Square were used. The results show that as a whole, CEM has not occurred in TSE. However we suggest users of financial reports evaluating firms’ profitability to consider this method for probable manipulation in earnings and use its results as a start point for further investigation.

This study provides evidence about the role of institutional investors in audit quality. Given that institutional investors are likely to prefer higher quality financial reports for financial analysis, we theorize that institutional investors will influence managers of companies in which they invest to improve reporting quality by using higher quality audit services. Considering sampling limitations, we examined 61 corporations, from 2005 to 2009. We utilized cross-sectional multivariable regression to test our research hypotheses. Our findings indicate that firms having relatively greater levels of institutional ownership have higher audit quality, even after controlling for other variables that could account for such an association, including client firm size and growth. In contrary, institutional ownership concentration induce a reduction in audit quality.

Big audit firms are the result of a hundred years of extensive merger and acquisition activity. A merger has to be perceived advantageous to some of the partners in the form of reduces risk, increase efficiencies, increased market share, higher service prices and higher profitability. Prior studies about the effect of mergers on audit market have yielded conflicting results. In this paper in accordance with merger literature, we developed 9 hypotheses. We used questionnaires to receive the perception of Iranian audit firm partners. Onesample T-test and Friedman test were used to analyse data. The resuls indicated that cultural characteristics, capital and ownership structure (extent and nature of stated-owned companies in the economy), audit market structure and lack of knowledge merger's advantages are the obstacles to establishing big audit firms in Iran, respectively.

This article examines the differences between strategic systems audit approach compared with traditional based audit approach and its impact on judgment performance the financial statements of the client’s business and reduce audit risk, has been discussed. Strategic systems audit approach advocates argue that this approach creates a better judgment to the financial statements of the client’s business than the traditional based audit approach. Statistical population in this study, auditors employed in Auditing Organization was determined. The study sample selection (auditors) had been done randomly and questionnaire was distributed between auditors. The statistical results indicate that the auditors should be chosen about 90 people who are working in Auditing Organization. The data analyzed with F and t-student test to test the research hypotheses. Normal data test were used with Kolmogorov-Smirnov test and according to the normal parametric test; data on parametric tests have priority. The results had showed auditors that used strategic systems audit approach have better judgment to the financial statements and this judgment is a factor to reduce audit risk.