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The application of analytical procedures in Big Four audit firms in Vietnam

Author

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  • Phuong Thi Nguyen

    (International School, Vietnam National University, Vietnam Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)

Abstract

"Objective - The primary objective of this exploratory research is to investigate the perception of Big Four auditors in Vietnam on the importance of analytical procedures in financial audits, factors affecting the adoption of analytical procedures, and how Big Four auditors apply analytical procedures in audit practice. Methodology/Technique - Through the utilization of qualitative research methods, including interviews, internal documents from Big Four audit firms, and secondary data, this study seeks to uncover valuable insights into the adoption of analytical procedures within the Big Four audit firms. The current study uses thematic analysis as the method for data analysis. Findings - The results indicate that analytical procedures were important and necessary in an audit engagement at the Big Four. Experienced auditors consider analytical procedures to be more important than less experienced auditors. Big Four employees actively apply these procedures in all three phases of an audit. Managers mainly perform analytical procedures when planning, and partners and seniors might be involved. The auditors utilize trend analysis, ratio analysis, and reasonable testing in the planning state. However, trend analysis is the major technique preferred. During the audit stage, the application of analytical procedures depended on the auditors' experience, audit clients' size, and characteristics. Big Four auditors use simple analytical techniques such as trend analysis, ratios analysis, and reasonable analysis but do not use advanced techniques such as regression analysis. The team leader, executives, and partners perform the analysis at the reviewing stage. The auditors still mainly apply Excel in the analytical procedures with almost all audit clients. With some extensive audits whose books are suitable with the data analysis software, auditors will utilize such software to automate analytical procedures. Novelty - The first study addresses the factors affecting and mode of application of analytical techniques in Big Four audit firms in Vietnam by utilizing a qualitative method. Type of Paper - Empirical"

Suggested Citation

  • Phuong Thi Nguyen, 2023. "The application of analytical procedures in Big Four audit firms in Vietnam ," GATR Journals afr229, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:afr229
    DOI: https://doi.org/10.35609/afr.2023.8.3(3)
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    References listed on IDEAS

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    1. Angela Hecimovic & Nonna Martinov-Bennie & Peter Roebuck, 2009. "The Force of Law: Australian Auditing Standards and Their Impact on the Auditing Profession," Australian Accounting Review, CPA Australia, vol. 19(1), pages 1-10, March.
    2. Greg Trompeter & Arnold Wright, 2010. "The World Has Changed—Have Analytical Procedure Practices?," Contemporary Accounting Research, John Wiley & Sons, vol. 27(2), pages 350-350, June.
    3. Khaled Samaha & Mohamed Hegazy, 2010. "An empirical investigation of the use of ISA 520 “analytical procedures” among Big 4 versus non‐Big 4 audit firms in Egypt," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 25(9), pages 882-911, October.
    4. Greg Trompeter & Arnold Wright, 2010. "The World Has Changed—Have Analytical Procedure Practices?," Contemporary Accounting Research, John Wiley & Sons, vol. 27(2), pages 669-700, June.
    5. D. Eric Hirst & Lisa Koonce, 1996. "Audit Analytical Procedures: A Field Investigation," Contemporary Accounting Research, John Wiley & Sons, vol. 13(2), pages 457-486, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Big Four; auditors; analytical procedures; analytical techniques; audit work;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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