Mutual perspectives of clients and auditors on the role of audit quality in fraud detection

Introduction: The tendency to obtain private information results from the lack of transparency and reliability of public information, so that capital market participants, in order to obtain reliable information, take into account the auditor's ability to detect fraud in their investment decisions. The purpose of this study is to investigate the role of audit quality in detecting fraud from the perspective of clients and auditors.

Method: The data required for this study were collected and analyzed using a questionnaire completed by 159 employees of auditing firms and financial managers of companies.

Result: The results show that auditors and clients have different views on the individual ability and responsibility of auditors to detect fraud. But independent auditors have the same view of the quality of fraud detection. In other words, the expectations of capital market participants to detect auditors' fraud are different in different dimensions and are a function of individuals' knowledge and understanding of the auditors' risks and responsibilities for detecting fraud.

Conclusion: Auditors are not reluctant to accept additional responsibility for fraud. However, the auditing profession is committed to improving audit methods to detect fraud and to increase efficiency. In other words, by increasing the quality of an organization's audit, auditors are adequately trained and work is planned based on auditors specializing in each industry, which increases the likelihood of fraud detection.