This report summarises the findings of an online survey conducted by ACCA and Macquarie University into auditors’ perceptions about the drivers of audit quality. It forms part of a three-part project investigating perceptions of CFOs, auditors and company director’s.
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Much-publicised audit failures such as the Enron collapse, along with the global financial crisis of 2007–8, have highlighted the importance of audit quality (AQ) and its role in upholding the stability of financial markets. Given these events, there is renewed awareness that the reliability of financial reporting by individual firms is crucial to their economic well-being, and that a high AQ promotes overall market confidence (Wallman 1996; Monroe and Tan 1997;). This awareness has reinvigorated academic research and debate on ways of improving AQ. The present study – an investigation of auditors’ perceptions about the main drivers of AQ – is a contribution to this growing body of literature, and continues a series of investigations of AQ by the present researchers.
Apart from reinvigorating academic research and debate on ways of improving AQ, the financial upheavals since the turn of the century have led to the introduction of new regulatory measures to promote AQ, such as the Sarbanes–Oxley Act (2002) in the US and the Economic Reform Program (Audit Reform and Corporate Disclosure) Act (2004) (CLERP 9) in Australia. More recently, the International Auditing and Assurance Standards Board (IAASB) released A Framework for Audit Quality: Key Elements that Create an Environment for Audit Quality (2014) with the purpose of promoting an awareness of how best to achieve high AQ on a systemic basis. For this study special attention was given to this guidance.