Browsing by Author "Morais, Diogo Alexandre Felício"
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- The effect of client complexity on audit qualityPublication . Morais, Diogo Alexandre Felício; Kalogirou, FaniPrevious research suggests that audit quality may be influenced by various client characteristics. This dissertation examines whether changes in audit quality between different companies may be a reflection of audited companies’ own complexity. In this research, audit quality is proxied by ‘Absolute Discretionary Accruals’ and client complexity is proxied by ‘Sales to Industry’, the ‘Net Intangible Assets per Employee’, and a dummy variable for listed/unlisted companies (‘Listed Factor’). A series of regressions are run and aim to evaluate the relation between client complexity and audit quality and also to understand if that relations are similar between Big4 and NonBig4 clients. Additionally, a survey with audit professionals and an interview with an audit manager are conducted in order to evaluate how field professionals perceive the relation between the two factors. The regression results generally suggest that client complexity does not influence audit quality. The interviewed manager also does not perceive that there is a relation between the two factors. On the other hand, the survey results suggest that most junior auditors believe that audit quality is improved by client complexity.