Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors
The objective of the study is to examine audit firm size, the provision of non-audit services (NAS) and audit tenure as factors that influence the likelihood that an auditor agrees with allowing audit exemption. This study employs a 2 × 2 × 2 within-subject experimental design. Respondent auditors w...
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| Format: | Article |
| Language: | English |
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Penerbit Universiti Sains Malaysia
2016
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| Subjects: | |
| Online Access: | http://umpir.ump.edu.my/id/eprint/13985/1/fim-2016-hasnah-Audit%20Exemption%20for%20Small%20And%20Medium%20Enterprises.pdf |
| _version_ | 1825823082545152000 |
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| author | Hasnah, Haron Ishak, Ismail Yuvaraj, Ganesan Zulhalwati, Hamzah |
| author_facet | Hasnah, Haron Ishak, Ismail Yuvaraj, Ganesan Zulhalwati, Hamzah |
| author_sort | Hasnah, Haron |
| collection | UMP |
| description | The objective of the study is to examine audit firm size, the provision of non-audit services (NAS) and audit tenure as factors that influence the likelihood that an auditor agrees with allowing audit exemption. This study employs a 2 × 2 × 2 within-subject experimental design. Respondent auditors were required to evaluate 8 case scenarios. A total of 79 questionnaires were returned and used for data analysis. General Linear Measurement (Repeat Measure) was used to analyse the data. The study found that an audit firm size has a significant impact on the likelihood that an auditor agrees with offering audit exemption. The larger the size of the firm, the greater is the likelihood of agreeing with allowing audit exemption. Therefore, it is suggested that small audit firms (with 5 or fewer employees) merge and focus on activities that contribute more added value such as consultancy. In so doing, auditors from these firms would be required to improve their knowledge and capacity by offering these services and not merely focusing on traditional audit work for SMEs. This is because SMEs are known to have limited resources and capacity and thus would be expected to have poor internal control. The requirement of a mandatory audit for such firms might lead auditors to compromise their independence. Thus, the government and the Malaysian Institute of Accountant (MIA) should help small audit firms to develop the necessary knowledge, skills and competencies to perform non-audit services. |
| first_indexed | 2024-03-06T12:06:06Z |
| format | Article |
| id | UMPir13985 |
| institution | Universiti Malaysia Pahang |
| language | English |
| last_indexed | 2024-03-06T12:06:06Z |
| publishDate | 2016 |
| publisher | Penerbit Universiti Sains Malaysia |
| record_format | dspace |
| spelling | UMPir139852019-06-26T02:00:28Z http://umpir.ump.edu.my/id/eprint/13985/ Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors Hasnah, Haron Ishak, Ismail Yuvaraj, Ganesan Zulhalwati, Hamzah HF Commerce The objective of the study is to examine audit firm size, the provision of non-audit services (NAS) and audit tenure as factors that influence the likelihood that an auditor agrees with allowing audit exemption. This study employs a 2 × 2 × 2 within-subject experimental design. Respondent auditors were required to evaluate 8 case scenarios. A total of 79 questionnaires were returned and used for data analysis. General Linear Measurement (Repeat Measure) was used to analyse the data. The study found that an audit firm size has a significant impact on the likelihood that an auditor agrees with offering audit exemption. The larger the size of the firm, the greater is the likelihood of agreeing with allowing audit exemption. Therefore, it is suggested that small audit firms (with 5 or fewer employees) merge and focus on activities that contribute more added value such as consultancy. In so doing, auditors from these firms would be required to improve their knowledge and capacity by offering these services and not merely focusing on traditional audit work for SMEs. This is because SMEs are known to have limited resources and capacity and thus would be expected to have poor internal control. The requirement of a mandatory audit for such firms might lead auditors to compromise their independence. Thus, the government and the Malaysian Institute of Accountant (MIA) should help small audit firms to develop the necessary knowledge, skills and competencies to perform non-audit services. Penerbit Universiti Sains Malaysia 2016 Article PeerReviewed pdf en http://umpir.ump.edu.my/id/eprint/13985/1/fim-2016-hasnah-Audit%20Exemption%20for%20Small%20And%20Medium%20Enterprises.pdf Hasnah, Haron and Ishak, Ismail and Yuvaraj, Ganesan and Zulhalwati, Hamzah (2016) Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors. Asian Academy of Management Journal, 21 (2). pp. 153-182. ISSN 1394-2603 (print); 2180-4184 (online). (Published) http://web.usm.my/aamj/21022016/aamj21022016_7.pdf |
| spellingShingle | HF Commerce Hasnah, Haron Ishak, Ismail Yuvaraj, Ganesan Zulhalwati, Hamzah Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors |
| title | Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors |
| title_full | Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors |
| title_fullStr | Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors |
| title_full_unstemmed | Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors |
| title_short | Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors |
| title_sort | audit exemption for small and medium enterprises perceptions of malaysian auditors |
| topic | HF Commerce |
| url | http://umpir.ump.edu.my/id/eprint/13985/1/fim-2016-hasnah-Audit%20Exemption%20for%20Small%20And%20Medium%20Enterprises.pdf |
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