Int. J. Audit. 14: 1–24 (2010)
AUTHORS:
Modar Abdullatif
Husam Aldeen Al-Khadash
ABSTRACT:
Large international audit firms are increasingly expanding their activities around the world and increasingly promoting the concept of a similar quality audit to be performed by all their worldwide offices and member firms. This strategy includes developing and using a similar audit approach globally. This study surveys the views of Jordanian auditors, mainly from audit firms with international affiliations, about how such an international approach, with emphasis on the currently popular business risk approach, is applied in practice by Jordanian audit firms and how appropriate and practical the application of such an international approach to auditing is in different contexts.
The results of the study show that the business risk approach has been generally adopted by the larger Jordanian audit firms to varying extents, especially those which are full members of an international audit firm network. However, audit clients in Jordan face too many business risks, especially because of poor control systems, poor corporate governance structures, and unclear or non-existent corporate strategies and objectives.
These risks have to be addressed by the business risk approach under very low audit fees. Such factors have led to the business risk approach not being applied in the way that the large international audit firms intended, and not achieving the approach’s main objectives, leaving the audit profession with the question of how appropriate it is to adopt an international audit approach in different contexts.
Key words: Business risk approach, international audit firms, international audit approach, audit fees, Jordan
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