Golden Ratio of Auditing Research

The Influence of Leadership in Audit Teams on Audit Effectiveness

Muhammad Yamin Noch — Fri, 22 Mar 2024 00:00:00 +0000

The research investigates the influence of leadership within audit teams on audit effectiveness, aiming to understand the dynamics between leadership styles and contextual factors in shaping audit outcomes. Employing a quantitative descriptive approach, data is collected through surveys administered to audit professionals across various industries. Leadership styles, including transformational, transactional, and laissez-faire approaches, are assessed alongside contextual factors such as organizational culture, audit complexity, and team composition. Results reveal that transformational leadership positively correlates with audit quality and team performance, while transactional and laissez-faire leadership exhibit varying effects. Organizational culture, particularly ethical leadership practices, significantly influences audit effectiveness, fostering trust, accountability, and adherence to professional standards. Audit complexity moderates the relationship between leadership and audit effectiveness, highlighting the importance of adaptability and strategic acumen in guiding audit teams through complex engagements. Moreover, team composition, specifically diversity, impacts leadership dynamics and team performance, emphasizing the need for inclusive leadership practices. Overall, the study contributes to a nuanced understanding of the role of leadership in audit effectiveness, providing insights for audit firms and organizations to optimize leadership practices and enhance audit outcomes.

Facing Economic Uncertainty: Adaptive Audit Strategies

Mohammad Ridwan Rumasukun — Fri, 22 Mar 2024 00:00:00 +0000

: This qualitative study delves into adaptive audit strategies amid economic uncertainty to investigate auditors' navigation of uncertain economic landscapes. Through a systematic review of relevant literature, employing purposive sampling and thematic analysis, the research aims to uncover key insights. Findings reveal that auditors deploy various adaptive practices, including integrating data analytics and advanced technologies, adopting risk-based auditing approaches, and utilizing scenario planning techniques. These strategies enhance audit quality, efficiency, and effectiveness by identifying patterns, prioritizing audit procedures, and assessing financial resilience. Challenges such as data privacy concerns and the need for technical expertise are identified. Future research opportunities include exploring the impact of emerging technologies on audit practices and assessing auditors' role in environmental, social, and governance factors. Overall, the study underscores the importance of agility, innovation, and adaptability in contemporary audit practices, offering valuable insights for auditors and organizations confronting economic uncertainty.

Internal Audit versus External Audit: A Qualitative Perspective

Andika Pramukti — Fri, 22 Mar 2024 00:00:00 +0000

This qualitative study examines the roles, methodologies, effectiveness, and challenges of internal audit versus external audit within organizational contexts. The research aims to provide insights into the distinct yet complementary functions of internal and external audit, shedding light on their contributions to organizational governance, risk management, and financial reporting integrity. The study employs a comprehensive literature review approach, synthesizing existing research to explore definitions, conceptual frameworks, methodologies, practices, and assessments of effectiveness in both audit functions. Key findings reveal that internal audit serves as a proactive advisor to management, focusing on enhancing operational efficiency, strengthening internal controls, and driving continuous improvement and innovation. Conversely, external audit acts as a safeguard for external stakeholders, providing assurance on the reliability and integrity of financial statements. Methodologies and practices vary between internal and external audit, with internal audit employing risk-based auditing, compliance auditing, and performance auditing approaches, while external audit adheres to auditing standards and regulations. Despite their distinct roles, both audit functions face challenges related to audit quality, independence, and relevance. The study underscores the importance of understanding and leveraging the multifaceted contributions of internal and external audit to navigate the complexities of the modern business environment effectively.

A Qualitative Analysis on the Role of Auditors in Preventing Financial Crises

Muhtar Sapiri — Fri, 22 Mar 2024 00:00:00 +0000

This study investigates the pivotal role of auditors in mitigating risks associated with financial crises, focusing on risk assessment, internal control evaluation, and addressing complexities in financial instruments. Employing a qualitative research approach, data was gathered through comprehensive literature review and thematic analysis. Findings underscore auditors' significance as guardians of financial integrity, detecting errors, and fraud in financial statements, thus enhancing transparency and investor confidence. Moreover, auditors' assessment of internal controls aids in fraud prevention and compliance risk management, crucial for organizational resilience. Challenges in evaluating complex financial instruments highlight the need for specialized expertise and technological advancements. The study emphasizes interdisciplinary collaboration, continuous professional development, and adherence to ethical standards as essential strategies for auditors to navigate emerging risks effectively. Overall, the research contributes to understanding auditors' multifaceted role in preventing financial crises and underscores the importance of robust risk assessment practices in maintaining financial stability.

The Influence of Corporate Culture on Audit Practices and Ethics

Yaya Sonjaya — Fri, 22 Mar 2024 00:00:00 +0000

This study investigates the influence of corporate culture on audit practices and ethics, aiming to understand the mechanisms, challenges, and implications of cultural factors in shaping auditors' behaviors within organizational contexts. The research utilizes a qualitative approach, drawing on existing literature and theoretical frameworks to analyze the complex interplay between corporate culture and auditing practices. Through a comprehensive review, the study identifies key cultural dimensions, including leadership style, organizational values, communication patterns, and ethical norms, that significantly influence auditors' experiences and behaviors. Findings reveal that auditors operating within organizations characterized by strong ethical cultures demonstrate higher levels of ethical sensitivity, professionalism, and adherence to professional standards, while those in environments with weak cultures may face pressures compromising their independence and integrity. Theoretical perspectives such as agency theory, stakeholder theory, and social identity theory are employed to elucidate the mechanisms underlying these relationships. The implications of the study underscore the importance of fostering a strong ethical culture, incorporating cultural assessments into audit engagements, and investing in resources and technologies to mitigate ethical risks effectively. By understanding how corporate culture influences audit practices and ethics, stakeholders can work collaboratively to promote integrity, accountability, and transparency within the auditing profession, thereby enhancing public trust and confidence.