Events

Professor Donghui Wu
Director, Centre for Institutions and Governance
School of Accountancy
The Chinese University of Hong Kong

We investigate the impact of remote auditing on audit quality and the good practices taken by auditors to improve audit quality in remote auditing. The outbreak of the COVID-19 pandemic in China provides an opportune testing ground for analyzing the impact of remote auditing on audit quality. Using both survey and archival data, we document that audit quality is lower when auditors switch to remote auditing following the outbreak of the pandemic. The negative effect of remote auditing is more pronounced for non-local or short-tenured auditors. However, several good practices, including adjusting audit procedures timely, relying more on risk evaluation and data analysis, emphasizing the sufficiency and reliability of digital evidence, and exploiting information and communication technology, can improve the effectiveness of remote auditing. Our findings can help financial statement users better understand the quality of audits when conducted virtually and have implications for practitioners to improve audit quality in remote auditing.