The effect of the regulation of the statutory audit profession on the financial audit quality : “a field study on a sample of professionals and academics”

Abstract EN

In line with the global changes and the action for international standardization, the financial audit profession in the Algerian business environment knows significant regulatory changes in the last decade.

Which encourages the research to find out the effect of the regulation of the profession on the financial audit quality in the Algerian business environment, by analysing the opinions of a sample consisting of (68) respondents, among practitioners of the statutory audit profession, and academic researchers specialized in accounting and auditing in each of the Wilayats of Ouargla and Ghardaia.

After collecting data during the year 2019, they are analysed with the descriptive statistics, also the (Mann-Whitney U) test is used to detect expected differences between the opinions of the tow study samples.

The study concluded that the regulation of the profession provides incentives that help improving quality if they are activated, but also includes deficiencies that may limit quality if they are not remedied.

The results also indicated that there is consensus among professionals and academics regarding the effect of regulation on quality, with greater support from academics, reflecting the expectation gap between professionals and academics in terms of perceiving factors influencing financial audit quality.

Originality / value : This study extends the auditing literature on the relationship between the regulation and quality (in two opposite directions) by examining the effect the incentives and deficiencies offered by the regulation on the financial audit quality in Algeria.

Practical implications : The contribution of this study consists in the recommendations it submits to the regulating bodies of the profession in Algeria in order to make regulatory adjustments able to activate the incentives offered by the regulation to help in improving the quality, and on the other hand, work to remedy the deficiencies involved in the regulation and amend them to remove the barriers that limit quality.

Research limitations : The sample is limited to two (02) Wilayats from the total of the Wilayats of Algeria, and the study does not cover all factors affecting the financial audit quality related to the regulation of the profession in Algeria.