Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors

The objective of the study is to examine audit firm size, the provision of non-audit services (NAS) and audit tenure as factors that influence the likelihood that an auditor agrees with allowing audit exemption. This study employs a 2 × 2 × 2 within-subject experimental design. Respondent auditors w...

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Main Authors:	Hasnah, Haron, Ishak, Ismail, Yuvaraj, Ganesan, Zulhalwati, Hamzah
Format:	Article
Language:	English
Published:	Penerbit Universiti Sains Malaysia 2016
Subjects:	HF Commerce
Online Access:	http://umpir.ump.edu.my/id/eprint/13985/ http://umpir.ump.edu.my/id/eprint/13985/ http://umpir.ump.edu.my/id/eprint/13985/1/fim-2016-hasnah-Audit%20Exemption%20for%20Small%20And%20Medium%20Enterprises.pdf

id	ump-13985
recordtype	eprints
spelling	ump-139852019-06-26T02:00:28Z http://umpir.ump.edu.my/id/eprint/13985/ Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors Hasnah, Haron Ishak, Ismail Yuvaraj, Ganesan Zulhalwati, Hamzah HF Commerce The objective of the study is to examine audit firm size, the provision of non-audit services (NAS) and audit tenure as factors that influence the likelihood that an auditor agrees with allowing audit exemption. This study employs a 2 × 2 × 2 within-subject experimental design. Respondent auditors were required to evaluate 8 case scenarios. A total of 79 questionnaires were returned and used for data analysis. General Linear Measurement (Repeat Measure) was used to analyse the data. The study found that an audit firm size has a significant impact on the likelihood that an auditor agrees with offering audit exemption. The larger the size of the firm, the greater is the likelihood of agreeing with allowing audit exemption. Therefore, it is suggested that small audit firms (with 5 or fewer employees) merge and focus on activities that contribute more added value such as consultancy. In so doing, auditors from these firms would be required to improve their knowledge and capacity by offering these services and not merely focusing on traditional audit work for SMEs. This is because SMEs are known to have limited resources and capacity and thus would be expected to have poor internal control. The requirement of a mandatory audit for such firms might lead auditors to compromise their independence. Thus, the government and the Malaysian Institute of Accountant (MIA) should help small audit firms to develop the necessary knowledge, skills and competencies to perform non-audit services. Penerbit Universiti Sains Malaysia 2016 Article PeerReviewed pdf en http://umpir.ump.edu.my/id/eprint/13985/1/fim-2016-hasnah-Audit%20Exemption%20for%20Small%20And%20Medium%20Enterprises.pdf Hasnah, Haron and Ishak, Ismail and Yuvaraj, Ganesan and Zulhalwati, Hamzah (2016) Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors. Asian Academy of Management Journal, 21 (2). pp. 153-182. ISSN 1394-2603 (print); 2180-4184 (online) http://web.usm.my/aamj/21022016/aamj21022016_7.pdf
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Malaysia Pahang
building	UMP Institutional Repository
collection	Online Access
language	English
topic	HF Commerce
spellingShingle	HF Commerce Hasnah, Haron Ishak, Ismail Yuvaraj, Ganesan Zulhalwati, Hamzah Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors
description	The objective of the study is to examine audit firm size, the provision of non-audit services (NAS) and audit tenure as factors that influence the likelihood that an auditor agrees with allowing audit exemption. This study employs a 2 × 2 × 2 within-subject experimental design. Respondent auditors were required to evaluate 8 case scenarios. A total of 79 questionnaires were returned and used for data analysis. General Linear Measurement (Repeat Measure) was used to analyse the data. The study found that an audit firm size has a significant impact on the likelihood that an auditor agrees with offering audit exemption. The larger the size of the firm, the greater is the likelihood of agreeing with allowing audit exemption. Therefore, it is suggested that small audit firms (with 5 or fewer employees) merge and focus on activities that contribute more added value such as consultancy. In so doing, auditors from these firms would be required to improve their knowledge and capacity by offering these services and not merely focusing on traditional audit work for SMEs. This is because SMEs are known to have limited resources and capacity and thus would be expected to have poor internal control. The requirement of a mandatory audit for such firms might lead auditors to compromise their independence. Thus, the government and the Malaysian Institute of Accountant (MIA) should help small audit firms to develop the necessary knowledge, skills and competencies to perform non-audit services.
format	Article
author	Hasnah, Haron Ishak, Ismail Yuvaraj, Ganesan Zulhalwati, Hamzah
author_facet	Hasnah, Haron Ishak, Ismail Yuvaraj, Ganesan Zulhalwati, Hamzah
author_sort	Hasnah, Haron
title	Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors
title_short	Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors
title_full	Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors
title_fullStr	Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors
title_full_unstemmed	Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors
title_sort	audit exemption for small and medium enterprises: perceptions of malaysian auditors
publisher	Penerbit Universiti Sains Malaysia
publishDate	2016
url	http://umpir.ump.edu.my/id/eprint/13985/ http://umpir.ump.edu.my/id/eprint/13985/ http://umpir.ump.edu.my/id/eprint/13985/1/fim-2016-hasnah-Audit%20Exemption%20for%20Small%20And%20Medium%20Enterprises.pdf
first_indexed	2023-09-18T22:17:12Z
last_indexed	2023-09-18T22:17:12Z
_version_	1777415417139036160

Audit Exemption for Small and Medium Enterprises: Perceptions of Malaysian Auditors

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