Determinants of the readiness of auditing firms for a quality assurance review

• Main Authors: Africa, Rae Marie M., Barlis, Nina Liza N., Dahilig, Ana Margaret T., Valerio, Graziella
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Financial statements; Auditing > Quality control; Accounting > Quality control
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/14696
• Institution: De La Salle University

Financial statements serve the purpose of exhibiting to its users, both internal and external from the organization, the financial position and performance of the company at its present state. With the information obtained from these financial statements, stakeholders such as creditors, investors, and customers will be able to make decisions based on what is provided them. Thus, it is essential that those preparing and reviewing these financial statements ensure that the quality of work they perform is sufficient to provide reasonable assurance to the company's stakeholders that all is presented is fair. This research was conducted to determine which characteristics auditing firms in the Philippines possess influence their level of readiness for the Quality Assurance Review Program of the Board of Accountancy (BOA) in the Philippines. It focuses specifically on those auditing firms falling under category A, B, C and D as defined by the Securities and Exchange Commission in its Memorandum Circular No. 13. The study examines the relationship of five firm characteristics (type of accreditation, length of existence, number of partners, number of practitioners, and number of clients), to the total readiness score for quality assurance review. Using multiple regression analysis, the final model showed that the type of SEC accreditation is a significant determinant to total readiness with Group B as the most ready, followed by Group D, then Group A, and lastly Group C. An alternative approach was also made to investigate on the scope of accreditation and foreign affiliations to explain in the difference in average score.