Angel II P. Esmeralda

Factors influencing audit quality: A systematic literature review

Introduction

Factors influencing audit quality: a systematic literature review. Systematic review (2019-2024) identifies key factors influencing audit quality, including independence, Big 4, audit committees, technology, and regulations. Essential for firms & regulators.

Abstract

This systematic literature review synthesizes empirical research on factors influencing audit quality, examining studies published between 2019 and 2024. The review aims to identify key determinants of audit quality and their relative importance across different contexts. Following the PRISMA 2020 guidelines, this review analyzed 92 peer-reviewed articles from Scopus, Web of Science, and Google Scholar. Studies were categorized based on factor type: auditor-level factors, audit firm-level factors, and external/contextual factors. The review identifies auditor independence, Big 4 affiliation, audit committee effectiveness, and audit tenure as the most consistently studied factors. Big 4 auditors generally demonstrate higher audit quality, though this effect is moderated by client characteristics. Audit committee financial expertise positively influences audit quality through enhanced oversight. Time budget pressure and low audit fees negatively affect audit quality. Emerging themes include the impact of technology adoption and regulatory changes on audit quality. This review provides a comprehensive framework integrating input, process, and output factors affecting audit quality. It offers practical implications for regulators, audit firms, and corporate governance stakeholders while identifying gaps for future research.

Review

This systematic literature review offers a timely and comprehensive synthesis of empirical research on the factors influencing audit quality, spanning a recent and highly relevant five-year period (2019-2024). The authors' adherence to the PRISMA 2020 guidelines, combined with a robust search strategy across major databases (Scopus, Web of Science, Google Scholar), lends significant credibility to its methodological rigor. The categorization of factors into auditor-level, firm-level, and external/contextual dimensions provides a clear and intuitive structure for understanding the multifaceted nature of audit quality determinants. This structured approach, analyzing 92 peer-reviewed articles, positions the review as a valuable resource for researchers and practitioners seeking an updated overview of the field. The review effectively identifies and discusses the most consistently studied factors, such as auditor independence, Big 4 affiliation, audit committee effectiveness, and audit tenure, providing a clear picture of their general impact. Notably, the abstract highlights specific insights, including the moderated effect of Big 4 affiliation by client characteristics and the positive influence of audit committee financial expertise. The acknowledgment of time budget pressure and low audit fees as negative influences, alongside the identification of emerging themes like technology adoption and regulatory changes, demonstrates the review's currency and foresight. The proposed "comprehensive framework integrating input, process, and output factors" is a significant contribution, promising to offer a holistic perspective that can inform practical implications for key stakeholders including regulators, audit firms, and corporate governance bodies. While the abstract clearly outlines the systematic process and identifies key factors, a full paper would benefit from a more explicit discussion of potential heterogeneity in findings across the "different contexts" or geographical regions, given the broad scope of audit quality research. Further, while factors are categorized and their general influence noted, a deeper synthesis on *how* their relative importance was determined and potential interactions between these factors (beyond simple moderation) would enhance the comprehensiveness of the proposed framework. Elaboration on the specific "gaps for future research" and a more critical evaluation of the methodologies prevalent in the synthesized literature could further solidify its contribution to advancing the audit quality discourse.

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