Quality of accounting audit in Albania, perceptions of accounting experts and members of audit committees

• Author: Elsa Tanushi
• Position: University of Tirana
• Pages: 83-95

European Journal of Economics, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

Vol. 3 No. 1

January, 2019

ISSN 2519-1284

Acces online at www.iipccl.org

83

Quality of accounting audit in Albania, perceptions of accounting experts and

members of audit commi ees

Elsa Tanushi

University of Tirana

Abstract

The purpose of this paper is to provide insight into the way in which the concept of audit

quality is perceived. In particular, the paper focuses on the viewpoints of the parties involved

in the audit market, such as the auditors and members of the Audit Commi ee of the audited

companies, which have available the relevant information and technical knowledge to

properly assess the quality of the audit. The paper examines the way in which the quality

of the audit is perceived and the way, in which it is displayed, which actions, symbols and

behaviors auditors/audit fi rms present to third parties that have a proper audit quality. The

study shows that respondent’s groups perceive a good level of audit quality, though not the

maximum, and that the perception of the quality of the audit is consistent between the two

surveyed parties. Also, research indicates that audit fi rms and auditors use di erent symbols

and behaviors to communicate to the market that apply proper audit quality. In general, the

fi ndings of the paper can be considered important for the stakeholders, for audit engagements

and for academic researchers wishing to develop a deeper understanding of this contribution.

Keywords: perceived audit quality, social context, audit commi ee, EDF, behavior and symbols.

JEL code: M42

Introduction

There are di erent actors involved in the audit process, auditors, audit commi ee

members, audited company management, investors and regulators. Each of these

groups may a ect the auditor's decisions, and each may have di erent opinions

on what constitutes a qualitative audit. My contribution to the relevant literature

in Albania is the analysis of the perceptions of some of the parties involved in the

audit process, the level of quality of the current audit, and the manner in which

this audit is performed by auditors / audit companies. All this taking into account

the social, legal and cultural context in which the profession of auditor is exercised.

To understand the audit, it is useful to fi rst understand the reasoning behind the exercise

of this profession and the role of external auditors. Company audits exist due to the

division between ownership and control of societies in the modern economy where

shareholders or partners have given resources to managers in order to maximize their

wealth. Since there is the presence of opportunistic managers who may not report the

true state of the company's performance, which can cause loss to the owners, the role

of auditors has as a consequence impact on reducing agency costs due to information

asymmetry and interests between the two above mentioned parties. For this reason,

the agency's theory, which concerns the control and asymmetry of information

between shareholders and managers, is normally used to legitimize the importance