Title : Audit Conservatism or Opinion Shopping? Audit Reporting Challenges in a Developing Country

Authors : Muin uddin AHmed, Mohammad Istiaq Azim

Abstract : The purpose of a financial statement audit is to enable the auditor to express an opinion on whether the statements are prepared in accordance with the financial reporting framework. This actually helps the business to remain viable in a competitive global environment and ensure its financial statements remain solid. Despite the importance of auditing, so far, no analysis has yet been done on the types of opinions issued in a developing country, Bangladesh. Specifically, there is no review published in recent times, when a number of significant incidents happened that might have an impact on listed companies’ reporting practices. Examples include the adoption of the International Financial Reporting Standard (IFRS) in 2013, introducing the new Financial Reporting Act in 2015, adaptation of a new format of auditor's report effective from the beginning on or after January 2018, etc. This research aims to assess the auditor opinions issued for the companies listed on the Dhaka Stock Exchange over a five-year period, and provides some in-depth understanding of the challenges it faces when providing an audit opinion. This research takes a sample from Dhaka Stock Exchange-listed companies during the period 2014–2018, explores the trend of issued audit opinions, and provides some analysis behind issued opinions. This research also compares the trend between audit report issued by Big 4 and non-Big 4 affiliated audit firms and any variation in opinion issues based on industry classification. This research entailed conducting interviews to gain some insights about the challenges faced by auditors when providing options.

Journal : Accountancy Business and the Public Interest Volume : 20 Year : 2021 Issue :
Pages : 340-357 City : Edition : Editors :
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