Factors influencing audit quality of audit firms: A study comparing the perspectives of professional auditors and students in Ho Chi Minh City

Abstract

This study examines the factors influencing audit quality among auditors and auditing students in Ho Chi Minh City. The research investigates the impact of seven key independent variables: Audit Firm Size (AFS), Audit Fees (AF), Audit Tenure (AT), Audit Ethics (AET), Auditor Experience (AEX), Auditor Independence (AI), and Auditor Competency (AC) on Audit Quality (AQ). The study adopts a quantitative research approach, utilizing a survey questionnaire distributed to two respondent groups: auditors working at audit firms and third- and fourth-year auditing students at universities in Ho Chi Minh City. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 4, with rigorous statistical evaluations including Cronbach's alpha, Composite Reliability (CR), and Average Variance Extracted (AVE) to ensure model validity and reliability, sample size is 472 observations. In particular 240 observations of auditors, and 232 observations of 3rd, and 4th Auditing students. The results found that Audit Fees (AF), Audit Tenure (AT), and Auditor Independence (AI) have the most significant positive impact on Audit Quality. Notably, Audit Fees (AF) emerged as the strongest determinant, suggesting that a more lenient approach to audit services will improve the quality of financial reporting. In addition, longer audit tenure positively contributes to Audit Quality, provided that auditor independence is maintained. Most of the surveys and comparisons between the two groups of Auditors and 3rd and 4th year Auditing students showed that the variables AF, AFS, AI, AT, AET, and AC all have a significant impact on AQ. While the survey of the Student group showed that the variable Audit Experience (AEX) did not show a statistically significant impact.