Research on International Standards on Auditing

ContentslistsavailableatScienceDirect

Journal of International Accounting, Auditing and Taxation

Research on International Standards on Auditing: Literature synthesis and opportunities for future research

Elina Haapamäki

^a,∗

, Jukka Sihvonen

^b

aUniversityofVaasa,SchoolofAccountingandFinance,P.O.Box700,FI-65101,Finland

bAaltoUniversity,SchoolofBusiness,P.O.Box11000,FI-00076,AALTO,Finland

a rt i c l e i n f o

Articlehistory:

Received28November2017 Availableonline23May2019 Keywords:

Auditing

InternationalStandardsonAuditing(ISA) Harmonization

a b s t ra c t

Research onInternational Standards on Auditing(ISAs)wouldgreatly benefitfrom a researchframeworkthatcategorizestheresearchstreamsrelatedtoISAsandsuggests areasforfutureresearch.ThispaperreviewsthecurrentresearchrelatedtoISAsanddevel- opsaframeworkforanalysisgoingforward.Weidentifysevenmainresearchstreams:the developmentandhistoryofISAs;adoptionofISAs;associationbetweennationalauditing standardsandISAs;financialreportingquality;auditreports;auditefficiency;andInter- nationalFinancialReportingStandards(IFRS)compliance.Foreachresearchstream,the mainresultsaresummarized.Attheconclusionofourliteraturereviewsforeachresearch stream,wesuggestareasrequiringfurtherexamination.

©2019ElsevierInc.Allrightsreserved.

1. Introduction

ResearchersareincreasinglyfocusingonInternationalStandardsonAuditing(ISAs),andpriorresearchsuggeststhatISAs areasessentialasInternationalFinancialReportingStandards(IFRS)inensuringthatacountry’sfinancialsystemissound andstable(Boolaky&Omoteso,2016;Boolaky&Soobaroyen,2017;Fraser,2010).However,nocomprehensivereviewof ISAresearchcurrentlyexists.ThispaperdevelopssuchareviewtoanalyzetheknowledgefromISAresearch,revealing,for example,thattheresultsformanydriversofadoptionofISAsareconsistentacrossstudies.Thissynthesisalsosuggeststhat ISAsarepositivelyaffectingfinancialreportingquality,andauditefficiencyismoreobservablewhentheauditisconducted usingISAs.ISAspromoteauditorbehaviorthatcontributestoeffectiveaudits(e.g.,Burns&Fogarty,2010).Forinstance, ISAshavewiderimplicationsforincreasingauditorskepticism.WhenexaminingIFRScompliance,priorstudiesindicated thatthereisanassociationbetweenIFRScomplianceandtheuseofISAs.Inaddition,previousstudiesrevealedthateven whenISAsareadopted,severalcountries’auditreportsarenotperfectlyconformingtothecontentandstructureofreports standardizedbytheInternationalFederationofAccountants(IFAC)(e.g.,Fakhfakh&Fakhfakh,2010).Thiscanbeduetothe inconsistentimplementationofISAs.

Thisliteraturesynthesishasthreeprimaryobjectives.Thefirstistoprovideacomprehensiveoverviewofcurrentaca- demicknowledgeaboutISAs.Thesecondistoidentifykeytopicsandissuesthatappearedinthepreviousliterature.Finally, thethirdobjectiveistosuggestfruitfulfutureresearchopportunities.Theremainderofthepaperisorganizedasfollows.

Section2presentsrelevantbackgroundinformationonthetopic.Section3presentsthedefinitionofISAsandexplainsthe methodusedtoconceptualizethissynthesis.Section4presentstheexaminationofthetheoreticalandempiricalliterature

∗ Correspondingauthor.

E-mailaddresses:elihaa@uva.fi(E.Haapamäki),jukka.sihvonen@aalto.fi(J.Sihvonen).

https://doi.org/10.1016/j.intaccaudtax.2019.05.007 1061-9518/©2019ElsevierInc.Allrightsreserved.

andprovidesacomprehensivelistoftopicsexaminedinpriorstudies.InSection5,thecitationanalysisispresented.Finally, Section6summarizestheconclusions.

2. Background

WhysynthesizestudiesrelatedtoISAs?Asglobalizationexpands,theneedforcommonlyunderstoodfinancialinfor- mationincreases(Fraser,2010).Highqualityauditsmayincreasethecredibilityoffinancialstatements,andmayreduce agencycostsandthecostofcapital(Minnis&Shroff,2017;Vanstraelen&Schelleman,2017).BurnsandFogarty(2010,p.

311)argued‘manyelementsleadtoqualityaudits;however,thedevelopmentandexistenceofappropriate,high-quality standardsisthefirststepontheroad.’Inaddition,BoolakyandSoobaroyen(2017,p.59)supporttheharmonizationof accountingandauditingstandardsas‘beneficialtothedevelopmentofaneffectiveandefficientglobaleconomythrough theprovisionofrelevantandcredibleaccountinginformationtousersandmarkets.’Furthermore,LeuzandWysocki(2016, p.538)arguedthat‘disclosureregulationorreportingstandardsneedtobeenforcedandhenceareunlikelytobeeffective withoutreliableauditing.’Therefore,itcanbecautiouslysuggestedthatreliableauditingcanbeachievedbyharmonizing auditingpractices,andtheprocessofharmonizationandimplementationofISAshasculminatedinsignificantattemptsat convergencearoundtheworldinthelastdecade(Boolaky&Soobaroyen,2017).However,relativelylittleresearchexistson theadoptionandthedegreeofcommitmenttointernationalauditingstandardsand,specifically,ISAs(Needles,Ramamoorti,

&Shelton,2002;Simunic,Ye,&Zhang,2017),eventhoughISAsareconsideredakeystandardforsoundfinancialsystems.In thiscontext,itisvitaltosynthesizethepreviousISA-relatedliteraturepublishedinpeer-reviewedhigh-qualityaccounting andauditingjournals.

3. Terminologyandmethodology 3.1. DefinitionofISAs

ISAsareprofessionalstandardsfortheperformanceoffinancialauditsoffinancialinformation.Thesestandardsareissued bytheIFACthroughtheInternationalAuditingandAssuranceStandardsBoard(IAASB).TheaimoftheISAsistoservethe publicinterestbyenhancingthequalityanduniformityofauditpracticesthroughouttheworldandstrengtheningpublic confidenceintheglobalauditingandassuranceprofession.Thefinalsetofclarifiedstandardscomprisesof36ISAs.

3.2. Method

Tointroduce,summarize,andanalyzetheextentofresearchonISAs,alistofpublishedstudieswascollectedusingthe followingmethods.Thearticlesreviewedwereidentifiedbyasystematicprocessthatcombineselectronicandmanual research.Combinationsofkeywordsusedtosearchforrelevantstudiesinclude:“InternationalStandardsonAuditing”,

“internationalauditingstandards,”and“ISA/ISAs.”AnelectronicsearchwasperformedusingScopus.Thesearchincluded publicationsuptoApril1,2018.Wealsoconductedamanualsearchbytrackingdownreferencesincollectedstudiesto guaranteethatallrelevantpaperswereincludedintheanalysis.

Oursearchidentified59 papersrelatedtoISAspublishedbetween1992and2018.Table1providesa countofthe studiesreviewed,groupedbysourcejournal,whileTable2presentsthekeyresearchfindingsofthepapersweidentified.

AsshowninTable1,thepaperswerepublishedinawidegroupofjournals,includingmanyprominentaccountingjournals, suchasAccounting,Organization,andSociety;ContemporaryAccountingResearch;TheInternationalJournalofAccounting;The InternationalJournalofAuditing;andAustralianAccountingReview.ThehighestnumberofISA-relatedstudiesispublishedin theManagerialAuditingJournal.TheacceptanceofISA-relatedstudiesinmajoraccountingandauditingjournalsemphasize itssignificanceinaccountingandauditingliterature.Fig.1presentstrendsofISA-relatedstudiesinaccountingandauditing literatureovertheperiodbetween1992and2017.

Afterthearticleswereidentified,wecarefullyreadeacharticle.SinceourresearchgoalwastoreviewresearchonISAs,we hadnopredispositionsastothetopicsthatmightbestudied.Basedonaninitialreviewofeachpaper,wemadenotesabout theirresearchquestionsandhypotheses.Thenwesearchedforsimilaritiesanddifferencesamongthepapers,whichresulted intheidentificationofseveralresearchstreams.Withinthesestreams,wethendevelopedtaxonomiestocharacterizeand synthesizetheliterature.Fig.2presentstheresearchstreamsidentified,anditalsopresentsthenumberofarticleswithin eachstream.Theseresearchstreamsshouldnotbeconsideredasisolatedfromeachother;theyareoverlapping,buteach sectionstandsaloneasmuchaspossible.

4. Previoustheoreticalandempiricalliterature

Weidentifiedsevenresearchstreams,basedonouranalysisofthe59articlesreviewed.Weaimtoprovideacontextfor understandingtheissuesexaminedintheISAstudiesandtoevaluatethecontributionsofthatliterature.Thus,thissection concentratesontheresearchstreamsidentified,anditalsoprovidesausefulframeworkofthemostfrequentlyexamined ISAresearchtopicsintheaccountingandauditingliterature.Withinthesevenresearchstreamsidentified,awidevariety ofissuesareinvestigated.Theaimistodescribetheresearchconductedineachareawiththegoalofdevelopingacohesive

Table1

Journalswherereviewedstudiespublished.

ManagerialAuditingJournal 13

TheInternationalJournalofAccounting 6

AustralianAccountingReview 4

InternationalJournalofAuditing 4

InternationalJournalofDisclosureandGovernance 3

JournalofInternationalAccounting,AuditingandTaxation 3

Abacus 2

Accounting,OrganizationsandSociety 2

AsianReviewofAccounting 2

Auditing:AJournalofPracticeandTheory 2

ContemporaryAccountingResearch 2

EuropeanAccountingReview 2

InternationalJournalofAccounting,AuditingandPerformanceEvaluation 2

Accounting,AuditingandAccountabilityJournal 1

AccountingHorizons 1

AccountinginEurope 1

AdvancesinAccountingBehavioralResearch 1

AdvancesinInternationalAccounting 1

BehavioralResearchinAccounting 1

InternationalJournalofAccountingandInformationManagement 1

JournalofAccounting,AuditingandFinance 1

JournalofAccountingandPublicPolicy 1

JournalofInternationalAccountingResearch 1

JournalofInternationalFinancialManagementandAccounting 1

TheAccountingReview 1

Total 59

Fig.1. TrendsofISArelatedstudiesinaccountingandauditingliteratureovertheperiodof1992-2017.

taxonomy.Aseachsectionpresentstheresultsandimplicationsofpriorstudies,eachsectionalsoendswithsuggestionsfor fruitfulfutureresearch.Table3summarizestheideasforfuturestudies.

4.1. DevelopmentandhistoryofISAs

EarlystudiesfocusedontheimportanceofISAsandonthedevelopmentandhistoryofauditingstandardsharmonization.

Roussey(1992)arguedthatthereisanobviousneedforauditingstandardsthatcanbeusedforinternationalinvestment andothermultinationalbusinesspurposes.In1991,theIAPC(theInternationalAuditingPracticesCommittee,theIAASB’s predecessor)votedtoenterintoamajorprojectto“codify”theISAs.Roussey(1996,p.138)suggestedthatthepurpose ofcodifyingtheISAswasto‘identifyandhighlightthebasicprinciplesandessentialprocedurescontainedintheexisting standards,includingrewritingtoconformtothenewcodificationformat.’ThecodificationsactionsdescribedbyRoussey (1996))hadaprofoundimpactontheaccountancyprofessionbycompletingthebasicbodyofstandardssuitableforusein auditingfinancialstatementsandcreatingamoreuser-friendlyandusefulsetofstandards.Roussey(1996,p.146)predicted that‘theseactionswouldencouragenationalaccountancybodiestotakenewactionontheacceptanceofISAsasnational standardsorasabasisfordevelopingnationalstandards.’Moreover,Loft,Humphrey,andTurley(2006))analyzedhow

Table2

StudiesonInternationalStandardsonAuditing.

Author(s) Researchtopic Typeofthepaper Findings/ConclusionsthatarerelatedtoISAs PanelA.HistoryanddevelopmentofISAs

Roussey,1992 Developinginternational accountingandauditing standardsforworld markets

Researchnote Concludedthatharmonizationofaccountingand auditingstandardsisaworthwhilegoal.

Roussey,1996 NewfocusfortheISAs Researchnote Discussedsomeimportantchangesthathappened inthedevelopmentofISAsandtheeffectonthe auditorperformingauditsinaccordancewith thesestandardsfornationalorforinternational purposesinthe1990s.Thesechangescreateda usefulsetofstandards.

LopézCombarros,2000 Accountingandfinancial auditharmonizationinthe EU

Researchnote Revealedthatthemovetowardsinternationally harmonizedreportingrequiresauditingtobe harmonizedthroughoutEurope,whichmeans adoptingISAs.Thiscanincreasecredibilityto accountinginformationandstimulateconfidence.

Loftetal.,2006 Changinggovernanceand accountabilitystructuresat theIFAC

Qualitativereviewof officialreports, consultationdocuments andrelatedresponses

Concludedthatgovernanceofauditorswhouse ISAshasbecomeamatterofglobalimportanceand thereforegovernancestructuresshouldbe reconfigured.

Fraser,2010 Asinglesetofworldwide auditingstandards:The roadislong...

Researchnote ExploredthecaseforconvergenceonISAsand encouragednationalregulatorsandothers involvedinthestandard-settingprocesstosupport ISAharmonization.

PanelB.AdoptionofISAs

Boolaky,2011 Auditingandreportingin Europe:ananalysisusing country-leveldata.

Empiricalstudyusing regressionanalysis

FoundthatnotallEUcountriesarefullycompliant withISAs.

Boolaky&Cooper,2015 Comparingthestrengthof auditingandreporting standardsand investigatingtheir predictorsinEuropeand Asia.

Empiricalstudyusing regressionanalysis

Aimedtocomparethestrengthofauditingand reportingstandards(SARS)inEuropeandAsia.

FoundthatwhereIFRSismandatory,ISAisnot alwaysmandatory.CountriesinEuropeareahead ofAsiaintermsofIFRSandISAadoption.

Boolaky&Omoteso,2016 ISAsintheinternational financialservicescentres:

Whatmatters?

Empiricalstudyusing regressionanalysis

InvestigatedfactorsinfluencingISAadoption.

Revealedthatpolitical,economic,socialandlegal factorsinfluenceISAadoption.

Boolaky&Soobaroyen,2017 AdoptionofISA:Do InstitutionalFactors Matter?

Empiricalstudyusing regressionanalysis

Usingneo-institutionaltheory,investigated determinantsofISAadoption.Concludedthat coercive,mimetic,andnormativepressures significantlyinfluenceISAadoption.

Yapaetal.,2017 Theprofessionalizationof auditinginlessdeveloped countries:thecaseofSri Lanka

Qualitativestudyusing interviewsand documentaryreview

Foundthatthelocalprofessionalaccountingbody, theInstituteofCharteredAccountantsofSriLanka (CASL)isactivelyinvolvedintheadoptionofISAs.

PanelC.AssociationbetweennationalauditingstandardsandISAs Wallage,1993 InternationalisingAudit:A

studyofauditapproaches intheNetherlands’

Qualitativestudyusing questionersand documentaryreview

Suggestedreasonsforsignificantdifferencesin implementationofISAsintheNetherlands.

Lin&Chan,2000 Auditingstandardsin China-Acomparative analysiswithrelevant internationalstandards andguidelines.

Qualitativestudyusing documentaryreview

Analyzedmotivationsforthedevelopmentof auditingstandardsinChina.Concludedthat ChinesestandardsmostcloselyresembledISAson manyimportantdimensions.

Brodyetal.,2005 Auditingstandardsin Poland:past,presentand future

Qualitativestudyusing documentaryreview

Highlightedtheimportanceofeducationinthe processofauditharmonizationandarguedthat auditregulatorystructuresmustbeconductedby parallelimprovementsintherulesandpracticesof otherprofessions.

Dellaportasetal.,2008 Internationalizingauditing standards:stakeholder viewsonAustralia’s strategicdirections.

Qualitativestudyusing questionersand documentaryreview

InternationalizationofAustralianauditing standardsexaminedusingstakeholder

submissionstotheSDP(strategicdirectionspaper) andcomparingtheproposedandapproved strategicdirectionsframeworksoftheAUASB.The approvedstrategicdirectionsareconsistentwith themajorityofrespondents’views,which supportedminimaldivergencefromISAs.

Table2(Continued)

Author(s) Researchtopic Typeofthepaper Findings/ConclusionsthatarerelatedtoISAs Mennicken,2008 Connectingworlds:The

translationofinternational auditingstandardsinto post-Sovietauditpractice

Qualitativestudyusing interviewsand documentaryreview

AnalyzedtheuseanddistributionofISAswithina Russianauditfirm,asitconfrontstheobstaclesof theglobalharmonization.Describedthisprocess asoneof“connectingworlds”andtranslation.

Samaha&Hegazy,2010 Anempiricalinvestigation oftheuseofISA520

“analyticalprocedures”

(APs)amongBig4versus non-Big4auditfirmsin Egypt

Empiricalstudyusing questionnairesurvey

FoundthatISA520wasnotthateffectivein stimulatingsignificantchangefortheuseofAPs.

Thiswasduetolackoftrainingandawarenessof auditingstandards,insufficientmaterialsabout auditingstandardstaughtatuniversities,andpoor Englishskills.

Duhovnik,2011 TimetoendorsetheISAs forEuropeanuse:the emergingmarkets’

perspective

Qualitativestudyusing documentaryreview

ExaminedtheendorsementoftheISAsinSlovenia, anemergingmarketeconomy.Emphasized importanceofaunifiedauditapproachforthe overallqualityofauditingandarguedthatthe clarifiedISAsarethebestinstrumentavailableto unifyauditinginEurope.

Samsonova-Taddei,2013 Socialrelationsandthe differentiallocalimpactof globalstandards:Thecase ofISAs.

Qualitativestudyusing interviewsand documentaryreview

Documentedthreetypesofresponsesbylocal auditfirmstotheimplementationofISAsin Russia,namely:(1)thosethatclaimtofollowthe nationalauditingstandardsmodelledonISAsand mandatedbyauditlaw;(2)thosethatvoluntarily provideISAauditsinaccordancewithoriginal ISAs;and(3)thosethatprovidepseudoaudits (‘blackaudits’)andignoreauditingstandards.

PanelD.FinancialreportingqualityandISAs Favere-Marchesi,2000 Auditqualityinthe

AssociationofSoutheast AsianNations(ASEAN).

Empiricalstudyusing questionnairesurvey

Suggestedauditqualitycouldbeimprovedin manyASEANcountriesbyrequiringtheuseofISAs.

Needlesetal.,2002 Theroleofinternational auditinginthe

improvementinternational financialreporting.

Qualitativestudy Suggestedthattheregulationsandcontrolofthe qualityofauditsisthecriticalfactorinachieving high-qualityfinancialreporting.Theyarguedthat ISAadoptionimprovesfinancialreportingquality.

Carsonetal.,2006 Financialreportingquality inAustralia

Empiricalstudyusing annualreportdata

ExaminedconsequenceswhenAustraliarevised auditreportingstandardAUS702toalignwith manyISAconceptsISAs(ISA700).Indicatedthat thechangestotheauditreportingstandardshada significantanddesirableeffectofimproving disclosuresinfinancialstatements.

Zhou,2007 Auditingstandards,

increasedaccounting disclosure,andinformation asymmetry:Evidencefrom anemergingmarket.

Empiricalstudyusing regressionanalysis

Foundthatthecostofinformationasymmetrywas substantialinChineseorder-drivenemerging markets.Resultshighlightedthatauditing regulationcanpermanentlyreducelong-run informationasymmetryriskincapitalmarkets.

Sami&Zhou,2008 Doauditingstandards improvetheaccounting disclosureandinformation environmentofpublic companies?Evidencefrom theemergingmarketsin China.

Empiricalstudyusing regressionanalysis

Examinedtheimpactofincreasedaccounting disclosurefollowingtheimplementationofthe firstsetofauditingstandardsinChinamodelled afterISAs.Revealedadecreaseinearnings management,implyinganincreaseinearnings quality.

Humphreyetal.,2009 Theglobalauditprofession andtheinternational financialarchitecture:

Understandingregulatory relationshipsatatimeof financialcrisis.

Researchnote ArguedthattoachievefinancialstabilityIFRSand ISAsshouldbeadopted.TheuseofIFRSandISAfor thepreparationandauditoffinancialreportsis expectedtoincreasetransparencyforglobal investors.

delCorteetal.2010 Effectiveuseofqualitative materialityfactors:

evidencefromSpain.

Empiricalstudyusing questionnairesurvey

Showedthatthemajorityofauditorsand preparersagreeontheissuanceofqualifiedaudit reportswhenthefinancialstatementscontain uncorrectedmisstatementsthatarebelowthe materialitylevelsbutarerelatedtoqualitative materialityfactorsincludedinISA450.

Corametal.,2011 TheCommunicativeValue oftheAuditor’sReport

Verbalprotocolanalysis (VPA),forsomeofthe participantsa

questionnaire/interview approachwasused

Suggestedthatauditors’reportsareimportantto analystsinthattheysignalalevelofreliabilityin thefinancialstatements.However,thecontentof theauditor’sreport,includingtheadditional contentoftherecentlyissuedlongerform auditor’sreport(ISA700,ASA700),generallywas notusedbyAustraliananalysts.

Table2(Continued)

Author(s) Researchtopic Typeofthepaper Findings/ConclusionsthatarerelatedtoISAs Goldetal.,2011 TheISA700Auditor’s

ReportandtheAudit ExpectationGap–Do ExplanationsMatter?

Experimentstudy FoundthatexplanationsoftheISA700auditor’s reportdonotresultinasmallerexpectationgap andsuggestedthattheauditopinionalonemay signalsufficientrelevantinformationtousers,and despitetheunderlyingobjectiveoftherevisedISA 700,thepresenceofthe(quiteextensive)ISA700 explanationsdonotaffecttheexpectationgap.

Kleinmanetal.,2014 Auditquality:A cross-nationalcomparison ofauditregulatoryregimes

Qualitativestudyusing questionnairesurvey

Examinedtheauditregulatorypracticesofpublic companyauditorsanddiscussedtheobstaclesto engageinintra-nationalaudit,cross-national audit,andthechallengesposedbydifferencesin auditingstandards.Theyincludedtheeffectsof nationalculture,investorlegalprotection, economicdevelopment,andvaryingfinancial standardsources.

Simunicetal.,2015 AuditQuality,Auditing Standards,andLegal Regimes:Implicationsfor InternationalAuditing Standards

Analyticalstudy Arguedthatoptimalauditingstandardsfora countryareacomplexfunctionofitslegalsystem, andauditqualitydependsonthelegalsystemand thecharacteristicsofauditingstandardsunder whichauditorsoperate.

Simunicetal.,2017 Thejointeffectsofmultiple legalsystemcharacteristics onauditingstandardsand auditorbehavior.

Analyticalstudy Derivedtheimpactsoflegalsystemcharacteristics andauditingstandardsonauditorbehavior(audit quality)andprovidedimplicationsforthe adoptionofISAs.

Lento&Yeung,2017 Earningsbenchmarks, earningsmanagementand futurestockperformance ofChineselisted companies

Empiricalstudyusing regressionanalysis

Foundhigherlevelsofincomeincreasing discretionaryaccrualsaroundtheearningslevel benchmarkrelativetotheearningssurprisesand earningschangesbenchmark.Foundalsoa negativerelationshipbetweenabnormalstock returnsandfirmswithlowearningsandhigher discretionaryaccruals.Resultsindicatethateven aftertheadoptionofIFRSandISA,themanagers employearningsmanagementstrategiesinorder tomeetkeyearningsbenchmarks.

Nohetal.,2017 Theeffectofthe

dependenceontheworkof otherauditorsonerrorin analysts’earningsforecasts

Empiricalstudyusing regressionanalysis

Foundapositiverelationshipbetweendependence ontheworkofotherauditorsanderrorinanalysts’

earningsforecasts,suggestingthatmore dependenceontheworkofotherauditors decreasesthequalityoftheauditofconsolidated financialstatements.

Boolakyetal.,2018 ThePerceptionsand DeterminantsofAuditing andReportingQualityin theAsia-PacificRegion

Empiricalstudyusing regressionanalysis

ConcludedthatIFRSadoptionishavinga significantimpactonauditingandreporting quality(ARQ).However,adoptionofISAsisonly moderatelysignificantlyassociatedwithARQ.

PanelE.AuditreportsandISAs

King,1999 Themeasurementof

harmonizationintheform andcontentofthe auditor’sreportinthe EuropeanUnion

Empiricalstudyusing annualreportdata

Determinedthedegreeofharmonizationinthe formandcontentoftheauditor’sreportintheEU andusedthebasicelementsoftheauditor’sreport listedintheISAs.

Gangollyetal.,2002 Harmonisationofthe auditor’sreport

Empiricalstudyusing annualreportdataand surveydata

ExaminedtheassociationbetweentheISA13and theharmonizationoftheauditreportstandards andtheauditreportsissued.Theresultssuggested alesscohesiveclusterstructureforthepost-ISA13 reportsandthattheharmonizationoftheaudit reportincreasedsincetheissuanceofISA13.

Farrugia&Baldacchino,2005 Qualifiedauditopinionsin Malta

Empiricalstudyusing annualreportdata

ConcludedthatMaltesecompanies,whichwere requiredtobeaudited,haveanapparentlyhigh rateofauditqualificationsandauditor’sreportsof non-Big4auditfirmsareoftendeficientoreven incompatiblewiththewordingoftheISAs.

Fakhfakh&Fakhfakh,2007 ThewordingofTunisian auditreports:a comparativestudywith internationalprinciples

Empiricalstudyusing annualreportdata

ShowedthatTunisianauditreportsarenot perfectlycompliantwiththecontentandstructure ofreportsstandardizedbytheIFAC.Thisdifference canbeexplainedbytheattributesoftheTunisian accountingandauditingenvironment.

Table2(Continued)

Author(s) Researchtopic Typeofthepaper Findings/ConclusionsthatarerelatedtoISAs Fakhfakhetal.,2008 Theimpactof

harmonisationbytheIFAC:

Anempiricalstudyofthe informationalvalueof Tunisianauditors’reports.

Empiricalstudyusing annualreportdata

ExaminedtheimpactoftheRevisedISA700in termsofthewordingcharacteristicsofTunisian auditors’reports.Theauditreportsexaminedare notfullycompliantwithalltheelements enumeratedbythisnewstandard.

Fakhfakh&Fakhfakh,2010 TheimpactofRevisedISA 700:aninternational empiricalcomparison

Descriptiveandanalytical study

ThenewISAontheauditor’sreportproposesa newwordingoftheauditingopiniontothe accountingprofessionalsandtheusersofthe financialstatements.Showedthatthe

internationalauditreportmustbeconcretizedby thereductionofinformationalasymmetry betweenusersofaccountingdata.

Sormunenetal.,2013 Harmonisationofaudit practice:Empirical evidencefrom

going-concernreportingin theNordicCountries.

Empiricalstudyusing regressionanalysis

FindingssupportedIFAC’sconcernsthatlocal implementationoftheISAdoesnotguaranteethe developmentofconsistentpractice.

Fakhfakh,2016 Linguisticperformanceand legibilityofauditors’

reportswithmodified opinions:Anadvanced investigationbasedonthe ISAsonauditreports.

Empiricalstudyusing linguisticfeaturesand assistedbyatextanalysis software

Assessedthelevelofunderstandabilityofthe modifiedauditreportsrecommendedbytheISAs.

Fromtheperspectiveoflinguisticperformance,the internationalstandardizationofauditreportswas notperfect.

PanelF.Auditefficiency

Colbert,1996 Colbert(1996)compared twoconceptsthatcrucial toplanningand

performingtheauditwork:

auditriskandmateriality

Qualitativestudy Comparedtwoconceptscrucialtoplanningand performingtheauditwork:auditriskand materiality.Emphasizedthatthecomparison betweenISAsandUSguidanceindicatesmany similaritiesandafewdifferencesbetweenthe standards.

Bedardetal.,2001 Auditor’sconsiderationof fraud:Howbehavioural researchcanaddressthe concernsofthestandard setters

Literaturereview Analyzedtheextantbehavioralliteratureonfraud accordingtofourbasicissuesidentified.Notedthe importanceofeachissue,andhoweachis addressedincurrentU.S.auditingstandards(SAS 82)andintheproposedrevisionofISA240.

McKee,2006 Increaseyourfraud

auditingeffectivenessby beingunpredictable!

Analyticalstudy Arguedthatsomefraudsmoreeasilycarriedout becauseauditorsaretoopredictable.Suggested thataccordingtoISAs(ISA240),oneresponseto fraudriskistoincorporateanelementof unpredictabilityintheauditplan.

Trotmanetal.,2009 ImpactoftheTypeofAudit TeamDiscussionson Auditors’Generationof MaterialFrauds

Experimentstudy ISA315andISA240similarlyrequireauditteam memberstodiscussthesusceptibilityofthe entity’sfinancialstatementstomaterial misstatementduetofraudorerror.Their interactinggroupfulfilstherequirementofthe ISAs.Theyintroducethepre-mortemtechniqueto theauditingliteratureasaformofinteracting group.Theyexamineditsimpactinafraud detectionsituationbutnotethatithaswider implicationsforincreasingauditorskepticism.

Burns&Fogarty,2010 Approachestoauditing standardsandtheir possibleimpactonauditor behavior

Qualitativestudy High-qualityauditingstandardspromoteauditor behaviorthatcontributestotheeffectiveaudit.

Suggestedthatstandardsettersshouldconsider promotingthesoundexerciseofprofessional judgment.

Hellman,2011 ChiefFinancialOfficer InfluenceonAudit Planning

Qualitativestudyusing semi-structuredinterviews

ArguedthatCFOsoftenassumetheroleofthose chargedwithgovernanceratherthantheroleof managementduringtheaudit-planningphase, whichmayhaveimplicationsforISA300(Planning anauditoffinancialstatements).

Fukukawaetal.,2011 ClientRiskFactorsand AuditResourceAllocation Decisions

Empiricalstudyusing archivaldata

Foundthatindividualclientrisksempirically grouptogetherinawaysimilartocategories discussedinrecentauditingstandards.Showed significantrelationshipsbetweenauditresource allocationdecisionsandbroadriskfactors.