TheEffectofRecurrent DeficienciesinPCAOBInspections on AuditQualitywithintheBigFourAuditFirmsinSouthAfrica

TheEffectofRecurrent DeficienciesinPCAOBInspections on AuditQualitywithintheBigFourAuditFirmsinSouthAfrica

Audit Quality, Auditor Ethics and Independence, Financial Statement Audit, Internal Control Over Financial Reporting Audit, PCAOB Inspection Deficiencies

The research aims to examine PCAOB inspection deficiencies' impact on audit qualityinSouthAfrica'sBigFour,highlightingchallengesinmaintaininghighstandardsacross Financial Statements (FS), Internal Control Over Financial Reporting audits (ICFR), Auditor Ethics, Professional Conduct, and Due Professional Care. The study analyzes South African BigFourfirms'auditworkanditsimpactonauditquality,focusingonfourPCAOBinspection deficiencies: FS and (ICFR) audits, Auditor Ethics/Independence, Professional Conduct, and Due Professional Care and Scepticism. The study used a mixed-method (qualitative and quantitative) case study approach. A self-administered questionnaire was used to collect primarydata.Secondarydatawascollectedfromexistingliteratureandinspectionreports.The test results indicate that the identified deficiencies significantly influence audit quality, establishing a strong connection between these deficiencies and the audit quality of Big Four firms. Thefindings suggest that recurrent deficienciesin PCAOBinspections havea negative effect on audit quality within the Big Four Audit Firms in South Africa, concluding that deficiencies in these variables (Integrated Audits of FS and ICFR, Auditor Ethics and Independence, Professional Misconduct, and Due Professional Care and Professional Scepticism) can adversely affect the overall audit quality of the Big Four firms

JosephKingsleyBadu1,JoboDubihlela2

https://dinastipub.org/DIJEFA/article/view/2118/1491

UniversityofTechnology

26January2024

221489347@mycput.ac.za

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