International Journal of Nonlinear Analysis and Applications

An efficient model for ranking and evaluating the independence of auditing firms with a fuzzy Delphi approach

Document Type : Research Paper

Authors

Department of Accounting, Semnan Branch, Islamic Azad University, Semnan, Iran

Abstract

Since independence is the most important characteristic of an auditor, we want to expand and develop this characteristic in auditing institutions, so our goal is to provide a practical and practical solution to maintain independence in auditing institutions. We collected and summarized. The experts stated that out of 34 characteristics of auditor independence, except 8 cases are applicable in audit institutions. If these features are not collected in one place and are dispersed and individually under the title of auditor independence, we will rarely see the independence of audit institutions. Currently, the only place where the characteristics of independence can be summarized and considered under a practical and operational model is in the ranking of audit institutions, which is done by the public accountants community. If these characteristics and criteria are taken into account and used in a practical way in the ranking of auditing institutions, we can increase and maintain the independence of auditing institutions. The ranking of auditing institutions can be more appropriate by considering the independence characteristics and bringing fair distribution of work.

Keywords

[1] S. Aqel, The perceptions of loan officers and auditors of factors affecting auditor independence: Evidence from Palestine, Account. 7 (2021), no. 4, 845–854.
[2] T. Arniati, D.A. Puspita, A. Amin, and K. Pirzada, The implementation of good corporate governance model and auditor independence in earnings’ quality improvement, Entrepreneur. Sustainabil. 7 (2019), no. 7, 125–138.
[3] J. Bakhtiari, Z. Pourzmani, and R.A. Royai, Social capital and auditors independence; professionalism approach, Manag. Account. 13 (2018), no. 47, 13–36. [In Persian]
[4] J. Bakhtiari, Z. Pourzmani, and R.A. Royai, Guanxi and auditor’s independence: Social connections theory test, Manag. Account. Audit. Knowledge 8 (2019), no. 30, 27–40. [In Persian]
[5] R. Darabi, B. Pasandideh Parsa, and M.R. Hajireza, Explaining the relationship between audit quality, auditor independence, audit fee, and financial reporting quality in insurance companies, J. Profession. Audit Res. 2 (2021), no. 1, 137–161. [In Persian]
[6] A. Desoky and H.A. Khasharmeh, Does the provision of non-audit services affect auditor independence and audit quality? evidence from Bahrain, Asian Acad. Manage. J. Account. Finance 14 (2018), no. 1, 25–55.
[7] N.T. Doan, C.D. Pham, T.T. U. Nguyen, M.P. Vu, and L.H. Pham, The effect of non-audit services on auditor independence: Evidence from Vietnam, J. Asian Finance Econ. Bus. 12 (2020), no. 7, 445–453.
[8] E.V. Elizeie, M. Tamimi, and H. Shalalnejad, Iranian investors’ perception of auditor independence, J. Account. Audit. Stud. 3 (2013), no. 10, 22–37. [In Persian]
[9] Y. Hassas Yeganeh, Philosophy of Auditing (12th ed.), Scientific and Cultural Publications, Tehran, 2018. [In Persian]
[10] V. Hatamian, The effect of auditor tenure and independence of the auditor’s report on the number of paragraphs, J. Account. Manag. Vision 2 (2019), no. 8, 41-55.
[11] J.G. Jenkins and J.D. Stanley, A current evaluation of independence as a foundational element of the auditing profession in the United States, Current Issues Audit. 1 (2019), no. 13, 17–27.
[12] S.M. Kang, I.T. Hwang, and K.S. Hur, Non-audit services and auditor independence depending on client performance, Aust. Account. Rev. 29 (2019), no. 3, 485–501.
[13] M.C. Knapp, Audit conflict: “An empirical study of the perceived ability of auditors to resist management pressure”, Account. Rev. 60 (1985), no. 2, 202–211.
[14] B. Marx and M. Harber, Auditor independence and professional scepticism in South Africa: Is regulatory reform needed?, South Afr. J. Econ. Manag. Sci. 23 (2020), no. 1, 1–12.
[15] R.K. Mautz and H.A. Sharaf, The Philosophy of Auditing, American Accounting Association, Published Sarasota, 1961.
[16] A. Modares, H. Ebrahimi, and M. Azizkhani, Safeguards to auditor independence against the displacement threat of clients, J. Empir. Res. Account. 6 (2013), no. 1, 155–180.
[17] F. Mohammad Rezaei and M. Mohammad Rezaei, Audit firms ranking and audit quality, Manag. Account. Audit. Knowledge 14 (2013), no. 4, 1–14. [In Persian]
[18] P. Onulaka, M. Shubita, and A. Combs, Non-audit fees and auditor independence: Ngerian evidence, Manag. Audit. J. 34 (2019), no. 8, 1029-1049.
[19] F. Saeedi, B. Jamshidi Navid, A.A. Taherabadi, and M. Ghanbari, The impact of individual characteristics on external auditors’ Whistleblowing intentions, J. Health Account. 7 (2017), no. 2, 42–66. [In Persian]
[20] S.H. Sajjadi and M. Ebrahimimand, Increasing factors of independent auditor’s independence, Account. Audit. Rev. 12 (2005), no. 2, 61–80. [In Persian]
[21] S. Soleimani, M.R. Shurvarzi, and Z. Nouri Topkanlou, The effect of threats on the auditors independence, Financ. Account. Knowledge 5 (2018), no. 3, 69–80. [In Persian]
[22] A. Soroushyar, B. Bani Mahd, M.R. Vakili Fard, and H. Amiri, The assessment of the effect of competition in audit market on auditor independence and quality of financial statements in companies listed in Tehran Stock Exchange, J. Secur. Exchange 28 (2017), no. 7, 77–94. [In Persian]
[23] A. Tahriri and M. Saqrlou, Auditor independence: A comparative analysis of the attitude of Iranian auditors and financial managers, Account. Empir. Res. 9 (2018), no. 36, 139–162. [In Persian]
[24] N.T.H. Yen, V.H.N. Thuy, N.H. Tien, and D.B.H. Anh, Enhancing auditors’ independence in auditing enterprises in Vietnam, Cogent Econ. Finance 7 (2019), no. 1, 160–224.
International Journal of Nonlinear Analysis and Applications
Volume 16, Issue 1
January 2025
Pages 209-220
  • Receive Date: 27 September 2023
  • Revise Date: 10 December 2023
  • Accept Date: 23 December 2023