Audit Quality Indicators: An Activity

• In Event: Audit Quality & Judgment

Abstract

The Public Company Accounting Oversight Board, the U.S. Center for Audit Quality, and international regulators, each have projects with the common goal of identifying predictors and measures of audit quality - referred to as Audit Quality Indicators (AQIs). The ultimate purpose of AQIs is to assist users of financial statements (e.g., audit committees, managers, investors, and regulators) in evaluating the quality of financial statement audits. Increased focus on AQIs by auditors and managers may also result in higher quality audits. This activity introduces students to AQIs. It is intended to: (1) help students understand the concept of audit quality, (2) facilitate a students’ understanding of how certain inputs and context influence audit quality, and certain outputs may measure audit quality, and (3) demonstrate how AQIs might be used by audit committee members and company management when evaluating and engaging an auditing firm.

Authors

• Anna J Johnson-Snyder, Bradley University

• Denise Dickins, East Carolina University

• Rebecca Fay, East Carolina University

• John T. Reisch, East Carolina University