Internal and External Factors Governing Quality of Statutory Financial Audit: A Perceptual Study

Siddhartha Sankar Saha


The study reviews the existing Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India governing ‘using the work of internal auditors’, ‘external confirmations’ and ‘using the work of an auditors’ expert’ and identifies 12 critical issues that may have significant impact on quality of statutory financial audit. Opinions of 227 Chartered Accountants (CAs) and 146 Students pursuing Chartered Accountancy course have been collected through a field survey using a close ended structure questionnaire. Respondents’ opinions are analysed using proportion of respondents with different degrees of agreement and their mean scores for different issues contained in the questionnaire. The study finds that auditors should necessarily check the internal control system present in the client company before starting the actual work. A strong Audit Committee could facilitate that purpose. Scientific design of confirmation requests is also necessary. Finally, it is inferred that existing SAs governing the aforesaid issues are adequate. However, its proper enforcement is needed to enhance the quality of statutory financial audit.

Keywords: Statutory Audit, Internal Audit, External Confirmations, Auditors’ Expert, Percentage Analysis,

Mean Score.

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