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Auditing in times of social distancing: the effect of COVID-19 on auditing quality

Author

Listed:
  • Khaldoon Albitar
  • Ali Meftah Gerged
  • Hassan Kikhia
  • Khaled Hussainey

Abstract

Purpose - This paper aims to discuss the theoretical impact of COVID-19 social distancing outbreak on audit quality. Design/methodology/approach - This paper uses a desk study method to explore the possible impact of COVID-19 crisis on five key considerations for audit quality during the pandemic. These include audit fees, going concern assessment, auditor human capital, audit procedures and audit personnel salaries. Findings - As many believe that the COVID-19 outbreak is as yet not a financial crisis, the authors, on the contrary, believe that the effects of the COVID-19 pandemic would be the toughest challenge for auditors and their clients since the 2007–2008 global financial crisis. Specifically, the authors believe that the COVID-19 social distancing can largely affect audit fees, going concern assessment, audit human capital, audit procedures, audit personnel salaries and audit effort, which ultimately can pose a severe impact on audit quality. Practical implications - Due to the implementations of work-from-home strategy, audit firms are highly recommended to invest more in digital programs, including artificial intelligence, blockchain, network security and data function development. This can help them to be more adaptable to working from home experience, which is ultimately expected to enhance the effectiveness and the flexibility of communication between auditors and their clients. Also, the authors recommend stock markets and other governmental bodies to provide temporary relaxations in compliance requirements to corporations. This procedure is expected to help firms that apply work-from-home strategy to report better earnings figures, which is appeared to be positively associated with audit quality. Originality/value - To date, to the best of the authors’ knowledge, there is no academic study that explores the potential impact of the COVID-19 outbreak on audit quality. This paper, therefore, fills an important research gap in the auditing literature. In addition, this paper can be used as a base to construct a research instrument (e.g. questionnaire or interviews) to provide empirical evidence on the potential impact of COVID-19 on audit quality.

Suggested Citation

  • Khaldoon Albitar & Ali Meftah Gerged & Hassan Kikhia & Khaled Hussainey, 2020. "Auditing in times of social distancing: the effect of COVID-19 on auditing quality," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 29(1), pages 169-178, September.
    • Handle: RePEc:eme:ijaimp:ijaim-08-2020-0128
    DOI: 10.1108/IJAIM-08-2020-0128
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    Citations

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    Cited by:

    1. Arfaoui, Feten & Kammoun, Ines, 2023. "Did accounting education remain resistant to digitalization during COVID-19? An exploratory study in the Tunisian context," Journal of Accounting Education, Elsevier, vol. 65(C).
    2. Aljughaiman, Abdullah A. & Nguyen, Tam Huy & Trinh, Vu Quang & Du, Anqi, 2023. "The Covid-19 outbreak, corporate financial distress and earnings management," International Review of Financial Analysis, Elsevier, vol. 88(C).
    3. Martin Selvakumar Mohanan & Vijayakumar Rajarathinam, 2023. "Deep insight of HR management on work from home scenario during Covid pandemic situation using intelligent: analysis on IT sectors in Tamil Nadu," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 14(4), pages 1151-1182, August.

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