Auditing in times of social distancing: the effect of COVID-19 on auditing quality

• DOI: https://doi.org/10.1108/IJAIM-08-2020-0128
• Pages: 169-178
• Published date: 23 September 2020
• Date: 23 September 2020
• Subject Matter: Accounting methods/systems,Accounting & finance
• Author: Khaldoon Albitar,Ali Meftah Gerged,Hassan Kikhia,Khaled Hussainey

Auditing in times of social

distancing: the ef‌fect of COVID-19

on auditing quality

Khaldoon Albitar

Faculty of Business and Law, University of Portsmouth, Portsmouth, UK

Ali Meftah Gerged

Leicester Castle Business School, De Montfort University, UK and

Faculty of Economics, Misurata University, Libya

Hassan Kikhia

PwC, Trollhättan, Sweden, and

Khaled Hussainey

Faculty of Business and Law, University of Portsmouth, Portsmouth, UK

Abstract

Purpose –This paper aims to discuss the theoretical impact of COVID-19 social distancing outbreak on

audit quality.

Design/methodology/approach –This paper uses a desk study methodto explore the possible impact

of COVID-19 crisis on f‌ive key considerationsfor audit quality during the pandemic. These include auditfees,

going concernassessment, auditor human capital, audit proceduresand audit personnel salaries.

Findings –As many believe that the COVID-19 outbreak is as yet not a f‌inancial crisis, the authors, on the

contrary, believe that the effects of the COVID-19 pandemic would be the toughest chal lenge for auditors and their

clients since the 2007–2008 global f‌inancial crisis. Specif‌ically, the authors believe that the COVID-19 social

distancing can largely affect audit fees, going concern assessment, audit huma n capital, audit procedures, audit

personnel salaries and audit effort, which ultimately can pose a severe impact on audit quality.

Practical implications –Due to the implementationsof work-from-home strategy, audit f‌irms are highly

recommended to invest more in digital programs, including artif‌icial intelligence, blockchain, network

security and data function development. This can help them to be more adaptable to working from home

experience, which is ultimately expected to enhance the effectiveness and the f‌lexibility of communication

between auditors and their clients. Also, the authors recommend stock markets and other governmental

bodies to provide temporary relaxations in compliance requirements to corporations. This procedure is

expected to help f‌irms that apply work-from-home strategy to report better earnings f‌igures, which is

appearedto be positively associated with audit quality.

Originality/value –To date, to the best of the authors’knowledge, there is no academic study that explores the

potential impact of the COVID-19 outbreak on audit quality. This paper, therefore, f‌ills an important research gap in

the auditing literature. In addition, this paper can be used as a base to construct a research instrument (e.g.

questionnaire or interviews) to provide empirical evidence on the potential impact of COVID-19 on audit quality.

Keywords Audit quality, Financial reporting, Social distancing, Audit profession, COVID-19 crisis

Paper type Conceptual paper

1. Introduction

The rapid outbreak of the Coronavirus Disease of 2019 (COVID-19) presents an alarming

health, economic and socialcrises that the world is grappling with. The COVID-19 pandemic

Auditing in

times of social

distancing

169

Received9 August 2020

Revised22 August 2020

Accepted25 August 2020

InternationalJournal of

Accounting& Information

Management

Vol.29 No. 1, 2021

pp. 169-178

© Emerald Publishing Limited

1834-7649

DOI 10.1108/IJAIM-08-2020-0128

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