Methods to assess accounting information quality by auditors

Abstract

At the current stage of the accounting system development, more attention is paid to the quality of information that compiles the reporting data of economic entities. This issue is discussed by both Russian and foreign scientists. This article is devoted to an audit of accounting information quality using an original methodology that allows determining the properties of accounting (financial) reporting that users are interested in. The purpose of the study is to develop a method to assess the quality of accounting information in audit to provide more detailed justification of the auditor's opinion expressed in a final document. The Russian and foreign scientists’ approaches to the study of information quality in accounting and audit have been considered using contrastive analysis and generalization methods.  The author proves the selection and determines the following criteria of information quality for an auditor: timeliness, reliability, authenticity and materiality that is an integral quality criterion. A step-by-step approach to assess the quality of accounting (financial) reporting conducted by an auditor is presented. This approach means a selection of the most informative properties of reporting data, an assessment of effectiveness of the identified auditing facilities in terms of compliance with the established criteria. This approach also means the justified implementation of the information characteristics of interest using the developed models to assess the information quality. An auditor’s attention is focused on the risk assessment of significant information distortion during the information flow processing and movement. The author's method to assess the accounting information quality using special calculations determines quantitatively its appropriateness for users. The present approach explains and proves an auditor’s opinion. The presented set of an auditor’s working documentation is the basis for the development of an appropriate internal standard and includes logically designed tables that allow investigating the risk areas relevant to an auditor step-by-step. The author concludes that the selection of criteria for information quality is determined by professional auditor’s opinion and users’ information needs of an audit report. The models developed by the author to assess the quality of accounting information have been successfully tested in organizations in Kirov region. The obtained results of the research are oriented for the wide application of the developed method to assess the accounting information quality when conducting an audit and providing audit-related services. This fact makes it possible to continue the research the process of auditor's opinion formation and justification.

Keywords

audit, accounting (financial) reporting, auditor, information quality, internal controls, timeliness, reliability, authenticity, materiality, auditor's opinion

For citation

Yudintseva L.A. Methods to assess accounting information quality by auditors. Perm University Herald. Economy, 2017, vol. 12, no. 2, pp. 311–325. DOI 10.17072/1994-9960-2017-2-311-326

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