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Enhancing Audit Quality Through Artificial Intelligence: An External Auditing Perspective, Jonah Mitan
Enhancing Audit Quality Through Artificial Intelligence: An External Auditing Perspective, Jonah Mitan
Accounting Undergraduate Honors Theses
The evolving landscape of the audit profession has been significantly influenced by the integration of artificial intelligence (AI) and automation, marking a pivotal shift in audit methodologies, the auditors' roles, and the overarching quality of audits. This thesis delves into the breadth of AI's impact on the industry through a comprehensive review of academic literature, professional publications, and industry insights, highlighting the transformative effects of AI on audit processes. AI-driven tools, including machine learning, deep learning, and natural language processing can expedite laborious audit tasks, enhancing data analytics capabilities, and enabling more accurate risk assessment and fraud detection. AI technologies …
Retain Or Rotate: Outcomes Of Frequent Auditor Switching, Ryan Decker
Retain Or Rotate: Outcomes Of Frequent Auditor Switching, Ryan Decker
Accounting Undergraduate Honors Theses
Regulators continue to debate the effectiveness of mandatory auditor rotation versus mandatory auditor retention in improving audit quality. Recent regulation in the European Union mandates auditor rotation, but if companies choose a more-lenient auditor with each switch, frequent switching could impair audit quality. I examine whether more-frequent switching leads to an increase in aggressive reporting and evaluate its effect on audit quality and audit attention. I find that audit quality decreases as the number of switches increases, with the results being driven mainly by switches between non-Big 4 audit firms. I also find that frequently switching between non-Big 4 auditors …
The Influence Of Nonpublic Audit Concentration On Public Client Audit Outcomes, Emily Hunt
The Influence Of Nonpublic Audit Concentration On Public Client Audit Outcomes, Emily Hunt
Graduate Theses and Dissertations
Nonpublic clients make up a substantial portion of audit firm client portfolios and the demands they place on the audit firm differ from those of public clients. As such, I investigate the influence of nonpublic audit concentration (NPAC) on the quality, timeliness, and cost effectiveness of public client audits. I find that NPAC is unrelated to audit quality and negatively related to the likelihood of late filing financial statements and audit fees for public clients. My study contributes to audit literature that investigates the effect of audit firm portfolio characteristics on audit outcomes by 1) providing a new measure that …
Implications Of Audit Office Resource Allocation Shocks: Evidence From Late 10-K Filings, Stuart Dearden
Implications Of Audit Office Resource Allocation Shocks: Evidence From Late 10-K Filings, Stuart Dearden
Graduate Theses and Dissertations
Prior literature examines consequences (e.g., negative market reactions, higher subsequent audit fees, and debt covenant violations) audit clients face arising from missed regulatory due dates. These clients likely pressure the auditor to provide additional resources to perform the audit. This paper examines whether an audit office resource allocation shock stemming from late-filing clients is associated with the audit quality of the other timely-filing clients in that audit office. I find that timely-filing clients are more likely to subsequently restate their financial statements when there are late-filing clients in the same audit office. Using audit fees as a proxy for auditor …
Does Industry-Level Information Affect Auditors’ Assessment Of Client-Level Risk?, David Rosser
Does Industry-Level Information Affect Auditors’ Assessment Of Client-Level Risk?, David Rosser
Graduate Theses and Dissertations
This study investigates auditors’ consideration of industry-level information in their assessment of client-level risk. Auditing standards suggest that industry-level information is likely to be important in the assessment of client-level risk, but the standards provide few specifics about how auditors should use industry-level information in the risk assessment process. I argue that industry norms serve as a benchmark for evaluating the risk of the client and that deviations from industry norms could indicate increased audit risk. I create measures that capture the extent to which clients deviate from industry norms using proxies for client-level risk factors. In my primary tests, …