TY - JOUR
T1 - Effects of the 2014 European reform on audit activity, the audit outcome and the audit market
T2 - the auditors’ view
AU - Castillo-Merino, David
AU - Garcia-Blandon, Josep
AU - Rodríguez-Pérez, Gonzalo
N1 - Publisher Copyright:
© 2024, David Castillo-Merino, Josep Garcia-Blandon and Gonzalo Rodríguez-Pérez.
PY - 2024/6/10
Y1 - 2024/6/10
N2 - Purpose: This paper aims to examine the effects of the 2014 European regulatory reform on auditors’ activity, the audit outcome and the audit market, with a focus on the Spanish market. Design/methodology/approach: The research is based on in-depth, semistructured interviews with partners of the main audit firms operating in the Spanish market. This qualitative approach provides a precise identification of the cause-effect relationships of the new measures introduced by the European audit regulation. Findings: The findings indicate that, based on auditors’ opinions, the costs of the main regulatory changes outweigh the benefits. The European Union (EU) Audit Regulation imposes more demanding provisions, such as an extended auditor’s report, mandatory audit firm rotation, more banned nonaudit services and stricter quality controls, resulting in substantial side effects on audit activity and the audit market. This could undermine the objective of enhancing the quality of audit services. Originality/value: To the best of the authors’ knowledge, this is the first study to analyze the effect of the 2014 EU regulatory reform on audit activity, audit market and audit outcome based on auditors’ perceptions. The findings may be of interest to academics, professionals and regulators alike, as they offer valuable insights for assessing the effectiveness of the new audit provisions. Additionally, the qualitative methodology used facilitates a causal analysis of the key elements introduced by the regulations, potentially paving the way for future research avenues.
AB - Purpose: This paper aims to examine the effects of the 2014 European regulatory reform on auditors’ activity, the audit outcome and the audit market, with a focus on the Spanish market. Design/methodology/approach: The research is based on in-depth, semistructured interviews with partners of the main audit firms operating in the Spanish market. This qualitative approach provides a precise identification of the cause-effect relationships of the new measures introduced by the European audit regulation. Findings: The findings indicate that, based on auditors’ opinions, the costs of the main regulatory changes outweigh the benefits. The European Union (EU) Audit Regulation imposes more demanding provisions, such as an extended auditor’s report, mandatory audit firm rotation, more banned nonaudit services and stricter quality controls, resulting in substantial side effects on audit activity and the audit market. This could undermine the objective of enhancing the quality of audit services. Originality/value: To the best of the authors’ knowledge, this is the first study to analyze the effect of the 2014 EU regulatory reform on audit activity, audit market and audit outcome based on auditors’ perceptions. The findings may be of interest to academics, professionals and regulators alike, as they offer valuable insights for assessing the effectiveness of the new audit provisions. Additionally, the qualitative methodology used facilitates a causal analysis of the key elements introduced by the regulations, potentially paving the way for future research avenues.
KW - Audit market
KW - Audit quality
KW - Audit regulation
KW - Auditors’ view
KW - Effects of audit regulation
UR - http://www.scopus.com/inward/record.url?scp=85195598991&partnerID=8YFLogxK
U2 - 10.1108/MEDAR-07-2022-1746
DO - 10.1108/MEDAR-07-2022-1746
M3 - Article
AN - SCOPUS:85195598991
SN - 2049-372X
VL - 32
SP - 109
EP - 140
JO - Meditari Accountancy Research
JF - Meditari Accountancy Research
IS - 7
ER -