Problems in the implementation of the international standard on quality control 1 (ISQC 1): Experience from small and medium audit firms in Thailand

Abstract

Previous findings showed that, broadly speaking, small and medium audit firms have been Pessimistic in adopting quality controls to improve audit quality because of no guidance to implement audit quality standards and limited resources. Regulators and standard setters Have attempted to improve audit quality by introducing the International Standard on Quality Control 1 (ISQC 1) to audit firms. Therefore, the main objective of this study is to identify potential problems in the implementation of ISQC 1. As a pilot project, a questionnaire survey was employed as a research methodology. Respondents included all levels of audit staff that have experienced ISQC 1. Both descriptive and inferential statistics were used in the analysis. The 372 subjects raised some concerns about implementing ISQC 1, including Leadership Responsibilities and quality control within the firm (tone at the top) and Engagement Performance, ranging from 3.53-4.05 (out of 5). The details of the concerns include emphasis on competition rather than quality audit culture, less emphasis on firm’s quality control systems, limitation of commitment of partners to long-term quality audit and time limitation on audit quality before issuing audit report. At the significant level of 0.05, the hypothesis testing shows that respondents who have more experience (high age and long-time work experience, higher education) are more likely to raise some concerns than those of less experience.