Audit Quality in Small & Medium Enterprises

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Audit quality is an essential part of the success of any business, especially small and medium-sized enterprises (SMEs). SMEs are often faced with the challenge of limited resources. Thus, efficient audit quality and audit practices are critical to their success. This review examines recent and not-recent empirical studies on audit quality and SMEs, discussing the importance of audit quality in SMEs and exploring the impact of various factors on audit quality.

Corporate governance aspects and internal and external audit processes have been shown to impact audit quality. For example, Raak et al. (2019) evaluated how audit market structure affected audit quality and cost in the SME-client category and discovered that market share diminishes price and quality rivalry. Similarly, Ernstberger et al. (2020) found that a small profit stream is associated with poor audit quality, particularly in medium-sized audit firms. Moreover, Nasrallah and El Khoury (2021) described an external audit as the primary assurance of financial reporting quality. It has been proven that audit quality is a crucial component of any business’s performance, particularly SMEs, and that efficient audit quality and processes are critical to their success.

Furthermore, studies have demonstrated that new digital technologies may assist SMEs. As such, Lugli and Bertacchini (2022) discovered that SMEs are better prepared to capitalize on developing digital technology. In turn, Chiarini et al.’s (2020) study found that auditing KPIs, monetary and economic indicators, and controlling improvement efforts are essential variables for improving SMEs’ quality performance. Finally, the analysis conducted by Crovini et al. (2020) demonstrated that rethinking risk management results in greater audit quality. Hence, digitization, corporate governance, and management can have an impact on audit quality in SMEs.

In conclusion, research has demonstrated that corporate governance issues, internal and external audit systems, and new digital tools can affect audit quality in SMEs. The review of recent empirical research on audit quality and SMEs highlighted the significance of audit quality in SMEs and investigated the influence of various factors on audit quality. These studies have shown that efficient audit quality and procedures are crucial to the success of SMEs.

References

Al-Najjar, B. (2018). Corporate governance and audit features: SMEs evidence. Journal of Small Business and Enterprise Development, 25(1), 163–179. Web.

Chiarini, A., Castellani, P., Rossato, C., & Cobelli, N. (2020). Quality management internal auditing in small and medium-sized companies: An exploratory study on factors for significantly improving quality performance. Total Quality Management &Amp; Business Excellence, 32(15–16), 1829–1849. Web.

Crovini, C., Santoro, G., & Ossola, G. (2020). Rethinking risk management in entrepreneurial SMEs: Towards the integration with the decision-making process. Management Decision, 59(5), 1085–1113. Web.

Ernstberger, J., Koch, C., Schreiber, E. M., & Trompeter, G. (2020). Are audit firms’ compensation policies associated with audit quality?Contemporary Accounting Research, 37(1), 218–244. Web.

Li, J., Wu, Z., & Zhang, L. (2020). Family involvement, external auditing, and the cost of debt: Evidence from U.S. small firms. Journal of Small Business Management, 59(4), 675–699. Web.

Lugli, E., & Bertacchini, F. (2022). Audit quality and digitalization: Some insights from theItalian context. Meditari Accountancy Research. Web.

Nasrallah, N., & El Khoury, R. (2021). Is corporate governance a good predictor of SMEs financial performance? Evidence from developing countries (the case of Lebanon). Journal of Sustainable Finance &Amp; Investment, 12(1), 13–43. Web.

Niemi, L., & Sundgren, S. (2012). Are modified audit opinions related to the availability of credit? Evidence from Finnish SMEs. European Accounting Review, 21(4), 767–796. Web.

Palazuelos, E., Crespo, N. H., & Del Corte, J. M. (2017). Accounting information quality and trust as determinants of credit granting to SMEs: The role of external audit. Small Business Economics, 51(4), 861–877. Web.

Raak, J., Peek, E., Meuwissen, R., & Schelleman, C. (2019). The effect of audit market structure on audit quality and audit pricing in the private‐client market. Journal of Business Finance &Amp; Accounting, 47(3–4), 456–488. Web.

Rikhardsson, P., & Dull, R. (2016). An exploratory study of the adoption, application and impacts of continuous auditing technologies in small businesses. International Journal of Accounting Information Systems, 20, 26–37. Web.

Sundgren, S., & Svanström, T. (2013). Audit office size, audit quality and audit pricing: Evidence from small- and medium-sized enterprises. Accounting and Business Research, 43(1), 31–55. Web.

Svanström, T. (2013). Non-audit services and audit quality: Evidence from private firms. European Accounting Review, 22(2), 337–366. Web.

Tsai, H., & Hua, M. (2009). The effects of audit quality on loan interest rates for small and medium-sized enterprises in Taiwan. International Journal of Business, 14(3), 265. Web.

Van Caneghem, T., & Van Campenhout, G. (2010). Quantity and quality of information and SME financial structure. Small Business Economics, 39(2), 341–358. Web.

Click Here To Order Now!

Audit Quality in Small & Medium Enterprises

Do you need this or any other assignment done for you from scratch?

We have qualified writers to help you.

We assure you a quality paper that is 100% free from plagiarism and AI.

You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)