Saudi Cultural Missions Theses & Dissertations
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Item Embargo Evaluating Audit Quality through Audit Quality Disclosure: An Examination of Audit Committee Practices in Saudi Arabia(Royal Holloway, University of London, 2025-02) Almutawa, Waleed; Napier, Christopher; Stadler, ChristianThis thesis explores current practices that audit committee members and audit committee attendees (ACMs) from a developing nation, Saudi Arabia, perform when trying to evaluate the audit quality of the audit firm. It also examines current approaches and challenges encountered while utilizing Key Audit Matters (KAMs) and Transparency Reports (TRs), and the necessity for Audit Quality Indicators (AQIs) (referred to as the audit quality disclosure). I conducted semi-structured in-depth interviews with 29 ACMs and those who have influence over the practices of the audit committee. I used documents to triangulate different sources and add credibility and trustworthiness to the findings. Theoretically, the study draws on the institutional logics perspective to understand the logic behind the current practices and beliefs. This study found that ACMs mainly use signals and clues that are obtained through the public domain, proposals, private sources, interactions with the auditors, and audit outputs to assess audit quality. The findings clearly show the predominance of professional logic among the majority of ACMs, and naïve stakeholder logic among ACMs of small companies and ACMs who lack audit literacy in large companies. The majority of the study participants do not utilize KAMs and TRs and do not support disclosing AQIs as transparency logic tools for assessing audit quality, although some younger interviewees show some inclination towards them. This thesis aims to broaden our understanding of the crucial role that audit committees are expected to play, particularly in evaluating audit quality. This role was broadly investigated in the audit committee effectiveness literature before. Furthermore, existing research on KAMs and TRs has largely overlooked their use in evaluating audit quality. Additionally, the literature on AQIs is scant, focusing mainly on identifying suitable AQIs and assessing their impact. Thus, this study attempts to shed light on these neglected but important realms of research.24 0Item Restricted The role and use of Artificial Intelligence (Al tools) in audits of financial statements(Aston university, 2024-09) Alsaedi, Amal; George ,SalijenIntegrating artificial intelligence (AI) in the auditing function holds significant potential to transform the industry. As firms and stakeholders increasingly recognise the value of and demand audit quality, the accuracy, validity, and integrity of information generated by audit processes have become a vital consideration. Integrating AI into audit processes would be viewed as advancing audit techniques. However, the current limited adoption of this technology by audit firms raises concerns about their awareness of its transformative potential. This study aims to identify AI tools used in auditing and their impact on the audit process and quality. The study bridges the existing gap using a secondary exploratory method. Qualitative data was collected from transparency reports by the Big Four audit firms, i.e., KPMG, Deloitte, EY and PwC, and audit quality inspection reports for the four firms by FRC. For recency purposes, only reports published between 2020 and 2023 were considered. A thematic analysis of the data collected reveals that adoption of AI and data analytics in auditing is still low, and the Big Four firms are actively promoting increased adoption. The results demonstrate a notable disparity between potential and current applications, as shown by a clear gap between the publicised potential of AI and data analytics and their implementation within audit processes.31 0Item Restricted Do Expertise in Audit Committees Impact Audit Quality? Evidence from Saudi Arabia(Durham University, 2024-09-06) Alahmadi, Ammar; Chaudhry, GhafranThis dissertation investigates the impact of audit committee (AC) characteristics on audit quality (AQ), using audit fees as a proxy, within the context of Saudi Arabia’s top 100 publicly listed firms in 2023. The study is motivated by the increasing focus on corporate governance (CG) reforms, driven by a series of high-profile corporate failures globally and the evolving regulatory landscape in Saudi Arabia, particularly under Vision 2030, which aims to enhance transparency and governance standards and attract international investment. The primary aim of this research is to assess the influence of financial expertise within ACs on AQ, further distinguishing between accounting and non-accounting expertise, and to examine the impact of AC members holding multiple directorships. Using a quantitative approach, the study employs ordinary least squares (OLS) regression analysis to evaluate the relationship between AC characteristics and AQ, with data manually collected from the Tadawul Saudi Exchange Stock website, annual reports, and financial statements. The findings reveal a significant positive impact of AC financial expertise on AQ, as evidenced by higher audit fees. However, when expertise is segregated into accounting and non-accounting categories, neither type significantly impacts AQ, suggesting that the combined presence of diverse expertise enhances AQ more effectively. Furthermore, AC members holding multiple directorships also show a significant positive correlation with audit fees, indicating their broader governance experience contributes to more rigorous audit processes. This dissertation contributes to the literature by providing empirical evidence from an emerging market, highlighting the distinct roles of various types of expertise within ACs and introducing audit fees as a proxy for AQ in Saudi Arabia—a novel approach that diverges from traditional proxies such as earnings management and audit firm type. The findings have practical implications for regulators, policymakers, and firms seeking to enhance CG structures, aligning with Vision 2030’s goals of fostering international confidence and bolstering economic diversification through improved governance practices.20 0Item Restricted The Effect of Auditing Regulations Changes on Audit Quality in the Australian Auditing Market(Saudi Digital Library, 2023-12-14) Almaatouk, Maha; Sultana, Nigar; Singh, HarjinderAccountants and auditors have often faced accusations of failures that contributed to the collapse of corporations across different domains. In response to these corporate collapses, the government revised auditing and corporate governance regulations to minimise the recurrence of such crises. This study examines the most notable modifications to audit regulations in Australia—the Australian Securities Exchange Corporate Governance Council’s (ASX CGC) Principles of Good Corporate Governance and Best Practice Recommendations of 2003 (ASX CGC, 2003), the Corporate Law Economic Reform Program Act of 2004 and the ASX CGC Corporate Governance Principles and Recommendations of 2010 (ASX CGC, 2010)—and examines how these changes affect the quality of audit practices in publicly listed firms by considering the opinions of auditors on the financial health of Australian firms and the firms’ management of earnings over an extended period. This analysis is necessary to confirm whether recent auditing and corporate governance reforms aimed at improving the quality of auditors’ work and auditor independence increase the quality of their opinions and reported earnings. Hypotheses were formulated based on prior literature and the agency theory framework, and data were gathered between 1 January 2001 and 31 December 2015, culminating in 12,401 firm-year observations. The study finds that certain changes made by ASX CGC 2003, especially those concerning financial expertise, are significantly and negatively associated with earnings management, while changes made by ASX CGC 2010 are significantly and positively associated with auditors’ opinions. Several sensitivity and robustness tests lend a degree of support to these core findings to an extent. This research adds value to the existing literature by presenting new empirical evidence regarding the current status of auditors’ opinions and earnings management in Australian firms, as well as the state of regulations designed to improve the quality of audits and corporate governance practices. More than just providing insights, the results of this study may prompt a reevaluation of current practices. They propose the potential impacts of audit regulation changes on auditors’ opinions and earnings management. This could lead to a more nuanced understanding and may suggest modifications to existing practices or regulatory approaches. These implications hold substantial relevance not just for investors, corporate management, auditors, and regulators, but also for capital market participants and scholars. As such, they should be considered tentatively pending further investigation and confirmation.45 0Item Restricted The Personal Characteristics of Audit Committee Financial Experts, Audit Quality and Financial Reporting Quality(Saudi Digital Library, 2023-11-29) Alrudayni, Ashwag; Clark, ColinThe financial expertise of audit committee members has received a lot of attention in academic research due to the significant role the committee plays in the quality of financial reporting. However, the findings of these studies have either been ambiguous or very complex. This research examines the influences of audit committee financial experts’ personal characteristics (gender, industry expertise, multiple directorships, tenure, and ownership of shares) on financial reporting and audit quality. The cross-sectional version of the modified Jones model, in which discretionary accruals served as the earnings management proxy, was employed to measure the quality of financial reporting. Audit quality was measured using the natural logarithm of audit fees paid to incumbent auditors. Ten hypotheses were developed within an agency and resource dependence theories framework. These were tested using data collected from a sample of 860 firm-year observations of ASX publicly-listed firms for the period 2016 to 2020. Using ordinary least squares (OLS) regression, the results indicate that financial experts with ownership are more effective in reducing earnings management, while there is no relationship between financial experts’ gender, industry experience, tenure, or multiple directorships with earnings management. This suggests that ASX-listed firms with a higher average number of audit committee financial experts with shares ownership have a favourable effect on financial reporting quality in Australia. The results also show that financial experts with multiple directorships and industry knowledge increase audit fees while there is no relationship between financial experts’ gender and the ownership of stocks or shares and audit fees. These findings indicate that financial experts with industry experience and multiple outside seats have a deeper understanding of the specific financial and regulatory requirements of their industry and have gained valuable experience (including governance experience) from other boards. This gives them the skills and motivation to demand higher audit quality assurances from their auditors. In turn, this leads to a higher level of oversight and a greater need for audit services, resulting in higher audit fees. However, the average tenure of audit committee financial experts is negatively correlated with audit fees. This finding indicates that long-serving financial experts have greater knowledge and experience about the company’s financial operations, resulting in a more efficient and effective audit and lower fees for the auditor. A number of robustness and sensitivity tests were conducted to verify that the main results of the study were robust across different measurements and estimators. The findings of this study have clear implications for corporate management, firms, regulators, and scholars. This study generates important insights for two key corporate governance mechanisms: audit committee financial experts and external auditors. It also contributes to new knowledge on corporate governance, financial reporting quality, auditing, and accounting.24 0