Audit Quality in Turkey on the Basis of KGK Inspection Reports

Turgay Saki̇n ()
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Turgay Saki̇n: İstanbul Üniversitesi İşletme Fakültesi, Muhasebe Anabilim Dalı, İstanbul, Türkiye

Muhasebe Enstitusu Dergisi - Journal of Accounting Institute, 2019, vol. 0, issue 61, 25-33

Abstract: Audit quality is an important research topic in accounting literature. However, though its importance there is not a common definition for audit quality. Audit quality research was made by employing audit quality proxies. If audit quality is defined on the grounds of material misstatement detection and performing audit engagement in accordance with auditing standards, relevant reliable data about audit quality can be obtained from auditors’ working papers. Even though those working papers are not open to the public, regulatory and supervisory institutions, governing the accountancy, inspect the working papers and report their findings. Inspection reports prepared by the Public Company Oversight Board (PCAOB) of the USA are highly used in audit quality research. Also in Turkey, the Public Oversight Accounting and Auditing Standards Board (KGK) inspects auditors’ files and reports their findings. Although reported findings directly do not present net facts on audit quality in Turkey, it is a significant indicator. In this paper 2016 and 2017 annual inspection reports of KGK are evaluated by comparing with PCAOB inspection reports. In 2016 and 2017, the ratio of auditing firms in Turkey subjected to inspections were %11 and %24. Fraud, responses against risks, documentation, and materiality were the common deficiencies found in these inspections.

Keywords: KGK inspection reports; Audit quality; Inspection report (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ist:imeder:v:0:y:2019:i:61:p:25-33

DOI: 10.26650/MED.2019591382

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