Auditing the auditors: has the establishment of the audit oversight board affected audit quality?
This paper reports on the results of a research into the relationship between audit quality during the years before and after the incorporation of the Audit Oversight Board (AOB) in Malaysia in 2010. As the AOB only audits auditors of listed companies this study is based on 50 companies’ audited fin...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
EconJournals
2015
|
| Online Access: | http://psasir.upm.edu.my/id/eprint/43893/ http://psasir.upm.edu.my/id/eprint/43893/1/Has%20the%20establishment%20of%20the%20audit%20oversight%20board%20affected%20audit%20quality.pdf |
| _version_ | 1848850351765061632 |
|---|---|
| author | Ismail, Hashanah Ung, Chui Theng |
| author_facet | Ismail, Hashanah Ung, Chui Theng |
| author_sort | Ismail, Hashanah |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper reports on the results of a research into the relationship between audit quality during the years before and after the incorporation of the Audit Oversight Board (AOB) in Malaysia in 2010. As the AOB only audits auditors of listed companies this study is based on 50 companies’ audited financial statements 2 years before and after AOB was established. A total of 200 firm years were observed. Using reported companies’ earnings to proxy for earnings and audit quality the data collected were analyzed using the modified Jones model for discretionary accruals. The study does find the discretionary accruals to be lower after AOB was established although the change is not significant. Although not significant statistically it evidences that having an independent auditor of the auditors with sanctioning powers does contribute towards greater assurance of audit quality being delivered and that regulation of audit complements the self-regulating regime by the profession for auditors of listed companies in Malaysia. |
| first_indexed | 2025-11-15T10:04:55Z |
| format | Article |
| id | upm-43893 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T10:04:55Z |
| publishDate | 2015 |
| publisher | EconJournals |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-438932018-01-16T09:25:55Z http://psasir.upm.edu.my/id/eprint/43893/ Auditing the auditors: has the establishment of the audit oversight board affected audit quality? Ismail, Hashanah Ung, Chui Theng This paper reports on the results of a research into the relationship between audit quality during the years before and after the incorporation of the Audit Oversight Board (AOB) in Malaysia in 2010. As the AOB only audits auditors of listed companies this study is based on 50 companies’ audited financial statements 2 years before and after AOB was established. A total of 200 firm years were observed. Using reported companies’ earnings to proxy for earnings and audit quality the data collected were analyzed using the modified Jones model for discretionary accruals. The study does find the discretionary accruals to be lower after AOB was established although the change is not significant. Although not significant statistically it evidences that having an independent auditor of the auditors with sanctioning powers does contribute towards greater assurance of audit quality being delivered and that regulation of audit complements the self-regulating regime by the profession for auditors of listed companies in Malaysia. EconJournals 2015 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/43893/1/Has%20the%20establishment%20of%20the%20audit%20oversight%20board%20affected%20audit%20quality.pdf Ismail, Hashanah and Ung, Chui Theng (2015) Auditing the auditors: has the establishment of the audit oversight board affected audit quality? International Journal of Economics and Financial Issues, 5 (spec.1). pp. 360-365. ISSN 2146-4138 http://www.econjournals.com/index.php/ijefi/article/viewFile/1506/pdf |
| spellingShingle | Ismail, Hashanah Ung, Chui Theng Auditing the auditors: has the establishment of the audit oversight board affected audit quality? |
| title | Auditing the auditors: has the establishment of the audit oversight board affected audit quality? |
| title_full | Auditing the auditors: has the establishment of the audit oversight board affected audit quality? |
| title_fullStr | Auditing the auditors: has the establishment of the audit oversight board affected audit quality? |
| title_full_unstemmed | Auditing the auditors: has the establishment of the audit oversight board affected audit quality? |
| title_short | Auditing the auditors: has the establishment of the audit oversight board affected audit quality? |
| title_sort | auditing the auditors: has the establishment of the audit oversight board affected audit quality? |
| url | http://psasir.upm.edu.my/id/eprint/43893/ http://psasir.upm.edu.my/id/eprint/43893/ http://psasir.upm.edu.my/id/eprint/43893/1/Has%20the%20establishment%20of%20the%20audit%20oversight%20board%20affected%20audit%20quality.pdf |