Does Convergence with International Standards on Auditing Improve Audit Quality?

• 成果类型: Article
• 署名作者: Hope, Ole-Kristian; Wang, Cyndia; Wu, Yaqian; Zhang, Min
• 署名单位: University of Toronto; BI Norwegian Business School; University of British Columbia; Nanjing Agricultural University; Renmin University of China
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2022-0610
• 发表日期: 2025
• 页码: 189-218
• 关键词: earnings management; IMPACT; performance; disclosure; pcaob; firm

摘要

Many countries have converged their domestic auditing standards with International Standards on Auditing (ISA). This study provides global empirical evidence on first-order determinants of audit quality by examining whether and how convergence affects audit quality through utilizing data on 41 jurisdictions and using a staggered difference-in-differences approach. We find that ISA convergence leads to higher audit quality on average. The positive effect is stronger for clients of domestic audit firms, in jurisdictions with stronger enforcement, and when the ISA convergence level is higher. Insights from textual features suggest that changes in principle-orientation, comparability, readability, and size (or length) of auditing standards are positively related to audit quality. Exploratory analyses of textual content using machine learning reveal that the emphases of ISA on going-concern assessment and legal compliance, fraud risk assessment and internal control evaluation, and related-party transactions and subsequent events contribute to enhanced audit quality.