Designing a Model of Audit Quality Based on Various Organizational Culture Factors

Document Type : Research Paper

Authors

1 Associate Prof, Department of Accounting, Faculty of Social Sciences, Imam Khomeini International University, Qazvin, Iran.

2 Ph.D. Candidate, Department of Accounting, Faculty of Social Sciences, Imam Khomeini International University, Qazvin, Iran.

10.22059/acctgrev.2024.367031.1008870

Abstract

Objective
Auditing is a very important and respected profession that should render precise and quality information to win the public's trust in society. This study seeks to develop a model for audit quality considering the components of organizational culture.
Methods
A mixed-methods design was employed. In the qualitative phase, open, semi-structured interviews were conducted with 17 auditing experts and academics. In the quantitative phase, the sample consisted of 106 managers and employees from audit firms, providing services to companies listed on the Tehran Stock Exchange. Following the grounded theory, qualitative data obtained from the interviews were analyzed through open, axial, and selective coding in the MAXQDA. Finally, an audit quality model was developed based on the components of organizational culture with 15 axial codes and 85 themes. This model was fitted using structural equation modeling in SmartPLS.
Results
According to the results of this study and the proposed model, the components of organizational culture that affect audit quality include empowerment, control and supervision, innovation and risk-taking, organizational ethics, communication management, group culture, cooperation culture, competitive culture, fundamental values, organizational vision and mission, attention to stakeholders, organizational goals and objectives, organizational excellence, organizational adaptability. Therefore, culture significantly influences the mechanisms driving audit quality, thus highlighting the imperative for audit firms to enhance their cultural practices.
 
 
Conclusion
The achieved results indicate that organizational culture is a vital element of organizational success, especially in quality improvement. The best starting point for improving an organization is to evaluate its culture because of its effect on individual and organizational behavior. Therefore, attention to the elements of organizational culture is essential for the successful growth of audit firms. In these firms, culture plays a major role in the processes that underlie audit quality. The findings also show that audit firms must develop not only the culture but also understand the relationship between organizational culture and quality. Such an understanding will help managers come up with efficient procedures and gain a competitive advantage. In general, the results suggest that organizational culture in the field of audit quality facilitates the provision of optimal services, effective decision-making, competitive advantage, and protection of stakeholders’ rights while increasing the productivity of the firm and the quality of audit services. Therefore, culture is a prerequisite for the development of audit firms and has a significant impact on audit quality. Future research efforts in audit institutions are encouraged to take into consideration dimensions of organizational culture as described in the model put forward by this study. Also, the subject of audit quality assessment should be studied in the framework of organizational intelligence, auditors' psychological characteristics, and professional ethics.

Keywords

Main Subjects

References

 
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Accounting and Auditing Review
Volume 31, Issue 1
2024
Pages 45-69

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