Reference no: EM133877162

Assignment: Accounting

Audit Quality

The context:

ICAEW (2021) write that:

"Audit is undergoing an unprecedented level of public scrutiny. The expectations of investors and other stakeholders - including employees, customers, suppliers and pension-holders - have increased in recent years and the purpose, scope and practice of audit need to keep pace". (p.2)

"The evolving debate about audit quality is complex". (p.4)

"Audit quality is a diffuse and opaque concept. Simply describing it is challenging...". (p.6)

Christensen et al. (2016) indicate that:

"Projects seeking to define, measure, and evaluate audit quality are on the agendas of auditing standards setters as well as audit firms" (p.1648). And they observe, at p.1649 that "[d]espite the importance of audit quality" there continues to be "debate [about] the definition, composition, and measurement of audit quality."

Francis (2023) suggests that:

"Nothing is arguably more important in auditing practice, regulation, and research than the concept of audit quality. Yet, despite its centrality to the understanding of auditing, defining it [audit quality] has proved elusive..." (p.123)

Task

Given several ‘audit scandals' in recent years, the audit profession has been under intense scrutiny and the need to improve "audit quality" has been on the agenda of many, as evidenced above. However, it would seem, that there is subjectivity surrounding the term "audit quality", what it is, and what it means.

You are required to produce an essay which covers the following points.

1) Provide a brief introduction as to why there are calls for improvements in audit quality, and

2) Explore the meaning of the term "audit quality" by taking account of appropriate content of the articles cited above and of any other writings from both the academic and professional press and any other stakeholder you deem appropriate. You should ALSO highlight why it is difficult to provide a precise definition of the term "audit quality".