Audit-Quality-in-Practice-A-Study-of-Perceptions-of-Auditors

Audit Quality in Practice: A Study of Perceptions of Auditors, Audit Committee Members and Quality Inspectors A thesis submitted to the University of Manchester for the degree of Doctor of Philosophy in the Faculty of Humanities 2011 Noor Adwa Sulaiman Manchester Business School 1 CONTENTS List of tables 4 List of figures 5 Abbreviations 6 Abstract 7 Declaration 9 Copyright statement 9 Acknowledgements 10 Dedication 11 Chapter 1: Introduction 12 1.0 Subject of the Thesis 12 1.1 Regulatory Framework in the UK 12 1.2 Audit Quality 16 1.3 Research Questions and Research Approach 18 1.4 The Justification and Importance of the Study 19 1.5 Structure of the Thesis 20 Chapter 2: Perspectives on Audit Quality 21 2.0 Introduction 21 2.1 Research Approaches to Audit Quality 22 2.1.1 Research Approaches derived from DeAngelo‘s Definition of Audit Quality 23 2.1.2 The Audit Process and Audit Quality 32 2.1.3. Perceptions of Audit Quality 38 2.1.4 The Limits of the Traditional and Other Approaches to Audit Quality 43 2.1.5 Auditing Practice in its Organisational and Social Context 45 2.2 Professional Perspectives on Audit Quality 53 2.3 Regulatory Perspectives on Audit Quality 56 2.3.1 The AIU Perspective on Audit Quality 58 2.3.2 The FRC Perspective on Audit Quality 61 2.4 The Corporate Governance Framework 63 2.4.1 The Audit Committee 64 2.4.2 Audit Committee Effects on the Audit Function 67 2.5 Implications of Research and Research Questions 74 2.6 Summary 76 Chapter 3: Theoretical Framework and Research Design 78 3.0 Introduction 78 3.1 Research Methodology 78 3.2 Theoretical Framework for the Research 81 3.3 Research Method 87 3.3.1 Research Design 87 2 3.3.1.1 Collection of Data and Analysis of Comment Letters 88 3.3.1.2 Collection of Data and Analysis of Semi-structured Interviews 90 3.3.1.3 Collection of Data and Analysis Survey Questionnaire 93 3.4 Summary 94 Chapter 4: Audit Quality in Practice-the FRC Discussion Paper 96 4.0 Introduction 96 4.1 Introduction and Justification for the Documentary Study 96 4.2 Comments on the Discussion Paper 99 4.2.1 Audit Firm Culture 99 4.2.2 The Quality of People 101 4.2.3 The Effectiveness of the Audit Process 103 4.2.4 The Reliability and Usefulness of the Audit Report 104 4.2.5 Other Factors Affecting Audit Quality 105 4.2.6 Other Issues 106 4.3 Questions for Consideration 110 4.4 Summary 114 Chapter 5: Audit Partners’ Perceptions Concerning Audit Quality 115 5.0 Introduction 115 5.1 Meanings of Audit Quality in Practice 115 5.1.1. Professionalism 116 5.1.2 Compliance Obligations 117 5.1.3 Commercial Values 120 5.2 Factors Influencing the Construction of the Meanings of Audit Quality 124 5.3 Representations of Audit Quality in Practice 132 5.4. Quality Conflicts in Practice 136 5.5 Perceptions Concerning the Impact of the Role of the Audit Committee on Audit Quality 139 5.6 Summary and Conclusions 143 Chapter 6: Audit Committee Members’ Perceptions Concerning Audit Quality