Audit Quality

Defining the concept of “audit quality” is an important undertaking, as it allows all stakeholders to determine whether the quality of an audit is improving over time or, conversely, is on the decline. Moreover, the unitary definition of this concept allows all stakeholders to refer to the same methodology for determining the audit quality and, consequently, allows different people interested in the quality level of an audit to use the same language when referring to such audit. An important conclusion that emerges from the analysis of the perspectives presented in this paper is that the audit quality level has two main components. That means that in order for an audit to be considered “of good quality”, two conditions need to be cumulatively met: the audit work must be performed in a manner that allows the identification of any malfunctions in the preparation of the client’s financial statements, on the one hand, and the audit firm needs to have the capacity to report any malfunctions that might be identified. Fulfillment of only one of the two conditions is therefore not sufficient for a quality audit; as a matter of consequence, it can be said that the two conditions are interdependent. Therefore, future research directions in the field of audit quality must focus on the parallel analysis of both quality conditions, given that narrowing the studies to the analysis of a single condition can provide information that does not truly reflect the quality of an audit approach.