INTRODUCTION
Background to the research
Service quality and client satisfaction are crucial for companies aiming to remain competitive and achieve growth in today's global market High-quality service is recognized as essential for business success, making these concepts significant topics of research in marketing literature and practical applications Understanding and enhancing service quality and client satisfaction can lead to improved performance and customer loyalty.
In the auditing industry, the importance of audit quality and client satisfaction cannot be overstated High-quality audits lead to increased client satisfaction and greater intentions for repeat business Following notable audit failures, such as those involving Arthur Andersen at Enron and Deloitte & Touche at Adelphia Communications, audit firms are prioritizing quality to enhance client trust and loyalty This focus on improving audit standards is essential for maintaining a positive reputation and ensuring long-term client relationships.
Joining the WTO has significantly boosted Vietnam's economic development, leading to an increased demand for accurate financial information from investors Consequently, audit and non-audit services are in high demand; however, recent financial scandals, such as those involving Bach Tuyet Cotton Corporation and Vien Dong Pharma JSC, have raised concerns about audit quality A report by the Vietnam Association of Certified Public Accountants (VACPA) revealed that many auditing firms fail to meet quality expectations, with a majority violating auditing standards In their 2012 review, only 6 out of 15 firms were deemed qualified, highlighting deficiencies in understanding accounting standards and risk assessment among auditors The 2012 financial year saw significant discrepancies in reported results from major companies, indicating that many auditors prioritize sales over operational integrity This underscores the urgent need to evaluate audit quality and its impact on client satisfaction in Vietnam's developing audit sector.
Research motivation
The audit service plays a crucial role in our economy by ensuring the accuracy and transparency of financial information in the market, which in turn supports the health and stability of economic development However, recent global financial crises have posed significant challenges for many enterprises, impacting their business operations.
Audit firms face significant pressure and challenges when evaluating and opining on financial statements, particularly in light of the credit crisis and economic downturn, which complicate assessments of a client's ability to continue as a going concern Auditors must carefully evaluate the fair value of assets and ensure that any impacts on the client are accurately reflected in the financial statements Additionally, the demand for higher service quality from both the market and clients necessitates that audit firms prioritize audit quality to enhance client satisfaction and navigate the current challenging landscape.
Numerous studies have explored the impact of audit quality on client satisfaction, particularly in developing countries Various models have been employed to assess audit quality, including SERVQUAL (Parasuraman, Zeithaml, and Berry, 1991), AUDITQUAL (Duff, 2004, 2009), and those based on specific audit quality attributes Notably, Schroeder et al (1986) analyzed perceptions of 15 attributes, which encompassed six factors related to the audit team.
This study investigates the impact of audit quality on client satisfaction in Vietnam, where research in this area is limited Previous studies by Carcello et al (1992) highlighted that audit team factors significantly influence audit quality more than audit firm factors Building on the SERVQUAL model, Ismail (2006) and others explored the relationship between audit service quality and client loyalty, employing various dimensions to measure audit quality Duff (2004) introduced the AUDITQUAL model, which has been empirically tested by researchers like Butcher, Harrison, and Ross (2013) The findings aim to benefit both audit firms and clients by enabling firms to better understand client needs and enhance service delivery, ultimately fostering client loyalty and improving audit services based on client feedback.
Research objective
This thesis aims to assess the impact of audit quality on client satisfaction in Vietnam by analyzing the perceptions of client firms, utilizing the AUDITQUAL model.
• Examine the relationship between reputation of the audit firm and client satisfaction
• Examine the relationship between capability of the audit firm and client satisfaction
• Examine the relationship between expertise of the audit firm and client satisfaction
• Examine the relationship between experience of the audit firm and client satisfaction
• Examine the relationship between responsiveness of audit firm and client satisfaction
• Examine the relationship between client service of the audit firm and client satisfaction
• Examine the relationship between empathy of audit firm and client satisfaction.
Research scope and methodology
The study was conducted in Ho Chi Minh City, Binh Duong, and Dong Nai province, focusing on CFOs, chief accountants, and general accountants with auditing experience The data collection process consisted of two stages: a pilot study involving interviews with nine accountants to refine the draft questionnaire, followed by a main study with 380 respondents Data analysis was performed using SPSS version 20.0, employing Cronbach’s alpha to assess the reliability of the measurement scale and exploratory factor analysis (EFA) to evaluate its validity Additionally, multiple linear regression was utilized to test the proposed hypotheses.
Structure of the study
This study is structured into five chapters, beginning with Chapter 1, which provides an overview of audit services and client satisfaction, discusses the state of audit quality in Vietnam, and outlines the research objectives and significance Chapter 2 delves into key concepts such as audit quality and client satisfaction, along with their interrelationship, while introducing the research model and hypotheses In Chapter 3, the methodology is detailed, covering questionnaire development, pilot studies, and the main study's sampling and data analysis methods Chapter 4 focuses on data analysis, employing Cronbach’s alpha to assess scale reliability, EFA for measurement validity, and multiple regression for hypothesis testing Finally, Chapter 5 summarizes the study's findings, addresses its limitations, and offers suggestions for future research.
LITERATURE REVIEW
Introduction
This chapter examines key studies on audit quality and client satisfaction, highlighting the relationship between the two While various perspectives on measuring audit quality exist, this study specifically emphasizes the AUDITQUAL framework Additionally, the chapter will outline the research model and hypotheses guiding this investigation.
Audit quality
Numerous researchers, including Kell et al (1986) and Gill et al (2001), align with the American Accounting Association's (AAA) 1973 definition of auditing as "a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events." This process aims to determine the degree of correspondence between these assertions and established criteria, ultimately communicating the results to interested users Similarly, Arens et al (1997) describe auditing as the method by which an independent, competent individual gathers evidence on quantifiable information related to a specific economic entity to assess and report on its alignment with established criteria.
Despite numerous attempts to define audit quality, there remains no consensus among researchers on a singular definition Sutton (1993) attributes this lack of agreement to the conflicting roles of key participants in the audit market, which include external users, clients, and auditors As a result, audit quality is perceived differently by various stakeholders, emphasizing that its meaning is subjective and varies based on individual perspectives The author has compiled several definitions of audit quality to illustrate this diversity in interpretation.
Audit quality, as defined by DeAngelo (1981), is the probability that an auditor will identify and report material misstatements in a client's financial statements This definition emphasizes two key components: the auditor's technical competence to detect errors and their objectivity in reporting those findings Building on this, Palmrose (1988) framed audit quality in terms of assurance levels, highlighting that the primary role of an audit is to ensure that financial statements are free from material misstatements Consequently, high audit quality is essential for users of financial information.
Researchers often define "poor audit quality" through the lens of negative outcomes, particularly audit failures that lead to litigation or malpractice claims against audit firms Casterella et al (2009) emphasize that such failures become evident in hindsight, highlighting the importance of auditors adhering to legal and professional standards to avoid detrimental consequences.
There is currently no universally accepted definition of audit quality, as stakeholders have varying perceptions that can influence the indicators used to assess it.
2.2.2 Research on measurement of audit quality
Audit quality has been explored from multiple perspectives in the auditing literature, utilizing various models for measurement Behavioral studies have focused on understanding perceptions of the attributes and factors that contribute to audit quality, often analyzing combinations of elements deemed significant in shaping these perceptions.
2007) The review of behavioural studies in this section focused on three typical models to measure audit quality Firstly, this was the model using audit quality attributes (Mock and Samet,
Since its introduction, various models have been employed to measure audit quality, starting with foundational studies by Schroeder et al (1982), Carcello et al (1986), and extending to SERVQUAL by Parasuraman, Zeithaml, and Berry (1991), which was utilized in research by Ismail et al (2006), Morton and Scott (2007), and Turk and Avcilar (2009) More recently, the AUDITQUAL model developed by Duff (2004) has been adopted to evaluate audit quality across nine distinct dimensions.
In their 1982 study, Mock and Samet developed a 32-item questionnaire to assess audit quality by surveying auditors in the United States Their findings revealed five key dimensions of audit quality: planning, administration, procedures, evaluation, and conduct.
In their 1986 study, Schroeder, Solomon, and Vickery built upon Mock and Samet's 1982 research to explore how audit committee chairpersons and audit partners perceive factors influencing audit quality Participants rated the significance of 15 factors, divided into six audit team factors and nine audit firm factors Key team factors included the level of partner/manager attention, audit planning and execution, communication between the audit team and management, team independence, skill mix and experience, and interaction with the audit committee Firm-wide factors encompassed technical updates for auditors, quality control procedures, regulatory expertise, firm reputation, office size and location, team rotation policies, litigation history, peer review outcomes, and the impact of professional fees The findings revealed that audit committee chairpersons prioritized audit team factors over firm-wide factors, a sentiment echoed by the audit partners.
Carcello, Hermanson, and McGrath (1992) conducted a study to assess audit quality by gathering perceptions from auditors, financial statement preparers, and users Utilizing attributes from Schroeder et al (1986) alongside additional criteria, they developed a comprehensive questionnaire featuring 41 audit quality attributes Through exploratory factor analysis (EFA), they distilled these attributes into 12 key factors The study identified four critical factors influencing audit quality: the experience of the audit team and firm with the client, industry expertise within the audit team, responsiveness to client needs, and adherence to generally accepted auditing standards (GAAS).
According to Schroeder et al (1986), a study revealed that auditors, financial statement preparers, and external users prioritize audit team member characteristics over those related to the audit firm when assessing audit quality Additionally, the authors identified significant differences among these groups concerning specific aspects of audit quality.
Duff (2009) highlighted that earlier models focused on audit quality attributes, such as those by Schroeder et al (1986) and Carcello et al (1992), were developed independently and lacked integration The SERVQUAL and AUDITQUAL models addressed this gap by combining attributes from previous audit quality literature into cohesive, multidimensional frameworks The original SERVQUAL model, introduced by Parasuraman et al (1985), identified ten dimensions of service quality, including reliability, responsiveness, and competence However, subsequent studies by Parasuraman et al (1988, 1991) streamlined these dimensions to five: reliability, assurance, tangibles, empathy, and responsiveness, leading to the creation of a 22-item scale for measurement.
In the context of auditing, Ismail et al (2006) utilized the SERVQUAL model to evaluate audit service quality and its correlation with client satisfaction and loyalty among Malaysian public listed companies Similarly, Morton and Scott (2007) proposed that audit quality encompasses credibility (brand name), reliability (auditor competence), control (contribution to internal control), and ancillary services (attitude and service of the audit team) They created a 28-item measure of audit quality derived from behavioral audit literature and the SERVQUAL scale to assess these four constructs Additionally, Turk and Avcilar (2009) affirmed that the five-factor construct of SERVQUAL is effective for measuring perceived service quality in audit firms.
The most recent model to measure audit quality is AUDITQUAL suggested by Duff
The AUDITQUAL model, developed by Duff (2004, 2009), builds on previous audit quality literature to create a structured framework comprising nine dimensions: Reputation, Capability, Responsiveness, Independence, Non-audit services, Empathy, Client service, Expertise, and Experience These dimensions are categorized into two main factors: technical quality, which includes Reputation, Capability, Independence, Expertise, and Experience, and service quality, represented by Responsiveness, Non-audit services, Empathy, and Client service To evaluate perceptions of audit quality, Duff employed a 56-item questionnaire targeting auditors, auditees, and external users.
He found that the AUDITQUAL model fitted the data well for each of the three samples
Many researchers have utilized the five-dimensional SERVQUAL model to assess audit quality due to its user-friendly nature in service firms However, critics argue that merely revising SERVQUAL items is insufficient for measuring service quality across diverse sectors, particularly in professional services like auditing, which differ significantly from industries such as hospitality or travel Ladhari (2008) emphasized the importance of industry-specific measures, suggesting that the AUDITQUAL model is more appropriate for evaluating audit quality, as it is tailored specifically for the auditing field This model has been empirically validated by several studies, making it a suitable choice for measuring audit quality in the Vietnamese context.
Client satisfaction
Client satisfaction is a crucial concept in marketing, defined as the emotional evaluation of the discrepancy between customer expectations and the actual performance of a product or service According to Oliver (1980), satisfaction arises when the received performance exceeds expectations, while a mismatch leads to disappointment Zeithaml and Bitner (2000) further emphasize that client satisfaction reflects whether a product or service meets customer needs Satisfied customers tend to exhibit loyalty, seek services more frequently, show less price sensitivity, and share positive feedback about the company.
Client satisfaction is crucial in the auditing industry, as dissatisfied customers may switch auditors or harm the auditor's reputation Research by Behn et al (1997) indicates that audit quality significantly influences client satisfaction, a sentiment echoed by Carcello et al (1992), who found a strong positive correlation between various audit quality attributes and client satisfaction.
Research framework and hypothesis development
The original AUDITQUAL model comprises nine dimensions: Reputation, Capability, Responsiveness, Independence, Non-audit services, Empathy, Client service, Expertise, and Experience However, this study narrows its focus to seven key dimensions: Reputation, Capability, Responsiveness, Empathy, Client service, Expertise, and Experience The dimensions of Non-audit services and Independence were excluded from the model, as they were deemed the least important by all three respondent groups in Duff's research (2004).
2.4.1 Audit quality dimensions and Client satisfaction
Numerous studies in marketing literature highlight the critical link between service quality and client satisfaction, with key contributions from researchers such as Oliver, Bitner, and Parasuraman A consensus exists among scholars that higher service quality is essential for enhancing client satisfaction This relationship is also well-documented in the auditing field, where research consistently supports the connection between audit quality and client satisfaction, as noted by Ismail et al.
(2006) examined the relationship between audit quality and client satisfaction and indicated a positive relationship between audit quality and client satisfaction Similarly, other scholars (e.g
Research by Behn et al (1997), Carcello et al (1992), and Samelson, Lowensohn, and Johnson (2006) highlights that various attributes of audit quality significantly influence client satisfaction This study aims to explore the relationship between different dimensions of audit quality and their impact on client satisfaction.
According to Abd-El-Salam, Shawky, and El-Nahas (2013), a corporation's image and reputation are vital in assessing any organization, as highlighted by various studies (Bitner, 1990, 1991; Gronroos, 1984; Gummesson and Gronroos, 1998; Andreassen and Lanseng, 1997; Andreassen and Lindestad, 1998; Kandampully and Hu, 2007; Sarstedt et al., 2012) This significance stems from the powerful impact that customer perceptions have when they encounter the organization's name (Fombrun, 1996; Hatch et al., 2003; Nguyen, 2006; Bravo et al., 2009).
A study by Nedal Sawan and Ihab Alsaqqa (2013) investigated audit quality in the Libyan oil industry, revealing that oil companies typically preferred reputable audit firms, such as the Big Four, due to their superior resources, technical expertise, and global reach This preference resulted in more effective audit processes, accurate information dissemination, and enhanced client interactions, ultimately leading to higher client satisfaction Supporting this, Chun (2005) noted that a strong reputation correlates with increased customer acquisition, reduced dissatisfaction, and improved profitability Additionally, Andreassen (1994) established a positive link between reputation, satisfaction, and loyalty, while Helm et al (2010) identified corporate reputation as a precursor to consumer satisfaction Therefore, the hypothesis can be formulated based on these findings.
H1: There is a positive relationship between reputation of the audit firm and client satisfaction
According to DeAngelo (1981), audit quality refers to the likelihood that an auditor will identify and report significant misstatements in a client's financial statements The auditor's active and direct involvement throughout the audit process plays a crucial role in determining this probability, which is heavily influenced by the auditor's technical expertise.
The capability of an auditor, defined as their ability to effectively conduct audits, plays a crucial role in determining audit quality and performance Research by Ismail (2010) highlights that client satisfaction with audit teams significantly improves when auditors actively engage in the process, perform fieldwork correctly, adhere to high ethical standards, and possess a strong understanding of accounting and auditing principles Therefore, this study proposes the hypothesis that enhanced auditor capability leads to increased client satisfaction.
H2: There is a positive relationship between capability of the auditor and client satisfaction
Research indicates that audit firms with a higher concentration of clients within a specific industry possess a deeper understanding of unique audit risks, leading to enhanced audit quality and increased client satisfaction (Kilgore, 2007; Dies & Giroux, 1992) Industry specialist auditors, who have developed specific knowledge pertinent to their field, are shown to deliver superior audit quality compared to non-specialists (Meyer, 2009) Numerous studies support the correlation between industry expertise and client satisfaction, with Lowensohn, Johnson, and Elder (2007) highlighting that auditor specialization positively impacts client satisfaction in local government audits Similarly, Behn et al (1997) and Yuniarti and Zumara (2013) affirm a significant positive relationship between industry expertise and client satisfaction Based on these findings, we propose the following hypothesis:
H3: There is a positive relationship between expertise of the audit firm and client satisfaction
According to Gul et al (1994), audits must be conducted and reports prepared with due professional care by individuals who possess adequate training, experience, and competence in auditing Prachsriphum, Jantarajaturapath, and Napat (2010) further emphasized the significance of knowledge and experience for success in the auditing profession Experience is gained through the accumulation of audit tasks and continuous training throughout one's career, with more experienced auditors demonstrating superior performance.
Research indicates that clients tend to be more satisfied with auditors who have maintained a long-term relationship with them, as these auditors possess valuable prior experience that enhances their understanding of the client's accounting systems and business environment Ismail (2010) highlights a significant positive correlation between client satisfaction and the audit team's prior experience, a finding supported by other studies, including those by Behn et al (1997) and Yuniarti and Zumara (2013) Consequently, the following hypothesis is proposed.
H4: There is a positive relationship between experience of the audit firm and client satisfaction
Responsiveness, as defined by Parasuraman et al (1991), refers to the willingness to assist customers and deliver prompt service In the auditing context, Duff (2009) expanded this concept, describing responsiveness as the auditor's ability to customize their services to meet the specific needs of the auditee Audit clients have particular requirements, such as meeting deadlines, timely report releases, and effective communication, which they expect the audit firm to fulfill Consequently, the responsiveness to client needs significantly enhances client satisfaction Numerous studies, including those by Behn et al (1997), Ismail (2010), and Yuniarti and Zumara (2013), have confirmed a strong positive correlation between responsiveness and client satisfaction in the auditing field Thus, we propose the following hypothesis:
H5: There is a positive relationship between responsiveness of the audit firm and client satisfaction
2.4.1.6 Client service and client satisfaction
In AUDITQUAL model, Duff (2009) described client service as “those processes the auditor has in place to assure a high quality audit” We noted that client service was labeled
The role of auditors is to ensure that financial statements are free from material misstatements, as highlighted by Duff (2009) High-quality client service is a crucial factor that drives audit quality, leading to increased client satisfaction Research by Yuniarti and Zumara (2013) demonstrates a significant positive correlation between audit quality commitment and client satisfaction, while Ismail (2010) supports this by indicating that an audit firm's dedication to quality is closely related to client satisfaction Therefore, we hypothesize a positive relationship between the client service provided by audit firms and overall client satisfaction.
H6: There is a positive relationship between client service of the audit firm and client satisfaction
Empathy is crucial in the relationship between audit firms and their clients, as it involves understanding and addressing the specific needs of customers (Parasuraman et al., 1988, 1991) In the auditing context, Duff (2009) emphasizes that auditors must grasp the challenges faced by their clients Clients expect auditors to proactively engage with their needs, which can significantly influence managerial decisions By assisting clients in gathering information and offering guidance, auditors enhance service quality and foster stronger relationships, leading to higher client satisfaction Research by Aga and Safakli (2007) highlights a significant connection between empathy and client satisfaction in professional accounting firms, supporting the hypothesis that empathy is a key factor in improving client relationships.
H7: There is a positive relationship between empathy of the audit firm and client satisfaction
Based on these above literatures, the relationship between dimensions of audit quality and client satisfaction is briefly described in the Figure 2.1:
The hypotheses are tested in this study as follows:
Hypothesis 1: There is a positive relationship between reputation of the audit firm and client satisfaction
Hypothesis 2: There is a positive relationship between capability of the audit firm and client satisfaction
Hypothesis 3: There is a positive relationship between expertise of the audit firm and client satisfaction
Hypothesis 4: There is a positive relationship between experience of the audit firm and client satisfaction
Hypothesis 5: There is a positive relationship between responsiveness of the audit firm and client satisfaction
Hypothesis 6: There is a positive relationship between client service of the audit firm and client satisfaction
Hypothesis 7: There is a positive relationship between empathy of the audit firm and client satisfaction.
Conclusion
This chapter explores the relationship between audit quality and client satisfaction, highlighting that prior research generally supports the notion that higher audit quality correlates with increased client satisfaction Various attributes have been employed to assess audit quality, but this study specifically utilizes the AUDITQUAL framework, which includes seven dimensions: Reputation, Capability, Responsiveness, Empathy, Client Service, Expertise, and Experience The methodology for this research will be detailed in Chapter 3.
METHODOLOGY
Introduction
This chapter outlines the research methodology employed in this study, detailing the research process, the design of the questionnaire, the sampling method, the data collection techniques, and the data analysis procedures.
Research process
Questionnaire design Pilot SurveyMain Survey
The research design process for this study is illustrated in Figure 3.1 It begins with the identification of the research problem and objectives, followed by a literature review An initial questionnaire was then created based on measurements from relevant previous studies This questionnaire underwent revisions through a back-translation process, evolving into a draft questionnaire The research design phase consists of two key sub-steps.
A pilot study was carried out involving interviews with nine chief accountants and general accountants to evaluate the content, quantity, and structure of questions in a draft questionnaire This process aimed to test the clarity and meaning of the measurement scales used Following the feedback received, the author revised the responses to create the final version of the questionnaire.
• Main survey: Final questionnaires were launched via email or sent the hard copy directly to clients of audit firms Data collection was done in one month
In the data analysis phase, the collected data underwent a cleaning process to ensure accuracy, followed by testing the reliability and validity of the measurement scales using Cronbach's alpha coefficient and Exploratory Factor Analysis (EFA) Subsequently, the author employed multiple regression analysis to evaluate the study's hypotheses.
The final step, we reported and discussed the findings based on the results of data analysis step.
Questionnaire development
This study utilizes Duff’s (2004) AUDITQUAL model to assess audit quality as perceived by customers, employing a modified questionnaire with 44 items to evaluate seven of the nine dimensions, including Reputation, Capability, Client Service, Responsiveness, Expertise, and Experience The original model utilized a 56-item scale to survey auditors, auditees, and external users A five-point Likert scale, ranging from strongly disagree (1) to strongly agree (5), is used to gauge responses Table 3.1 presents the measurement scales for all independent and dependent variables in the model.
Table 3.1: Items to measure audit quality (Draft questionnaire to measure audit quality)
Reputation 1 The audit firm is highly competent Beattie & Fearnley (1995)
2 The audit firm operates to the highest standards of integrity
3 The audit firm has rarely been found negligent in litigation against it – alleging inadequate audit performance
4 The audit firm is objective Warming – Rasmussen &
5 The audit firm is conscientious Warming – Rasmussen &
6 The audit firm is credible to third parties Duff (2004)
7 The audit firm enjoys a good reputation Beattie & Fearnley (1995)
8 The audit firm is independent of the board of directors
Capability 9 The engagement partner is highly competent Parasuraman et al (1991)
10 The engagement partner has high ethical standards
11 The engagement partner is actively involved in the engagement beginning with the initial planning and throughout the audit process
12 The engagement partner has financial statement users’ best interests at heart
13 The engagement partner is keen to understand what is happening within the client’s organization
14 The audit team staff are highly competent Beattie & Fearnley (1995)
15 The audit team staff operate to high ethical standards
Responsiveness 16 The audit firm is skillful in devising accounting treatments that generate results management wishes to obtain
17 The audit firm is willing to provide detailed cost information
18 The audit firm is willing to be flexible when scheduling the timing of audit visits
19 The audit firm’s office are geographically close to the client
20 The engagement is easily contactable Duff (2004)
21 There is a ‘good fit’ between the personality of the engagement partner and the finance director
22 The relationship between the engagement partner and finance director is relatively informal
23 Audit team staff create the minimum of disruption so far as practically possible
24 The audit team develops stringent time budgets for each audit area and expects people to meet them
Empathy 25 The audit team provides the client with personal attention
26 The engagement partner provides the client’s finance director with individual attention
27 The engagement partner has the client’s best interests at heart
28 The engagement partner is pro-active and Duff (2004) contributory (e.g suggests potential acquisition targets)
Client Service 29 The audit firm regularly conducts client service review meetings
30 The engagement partner arranges regular meetings with the client’s key staff to identify issues of concern
31 The engagement partner regularly identifies examples of added value to the client
32 The engagement partner and senior manager make frequent visits to the audit site for technical review purposes
33 The audit team are willing to provide guidance on accounting principles
34 There is frequent communication between the audit team and the audit committee
35 There is frequent communication between the audit team and executive management
Expertise 36 The audit firm has other clients in the same industry
37 The audit firm undertakes research into the client’s industry
38 The engagement partner is subject to internal review during the audit by other partners of the audit firm
39 The engagement partner is very knowledgeable about the client’s industry
40 The client has a knowledgeable and active audit committee
41 The senior manager and manager assigned to the audit are very knowledgeable about the client’s industry
Experience 42 The engagement partner has been performing the audit for the past three years
43 The manager of the audit firm has been performing the audit for at least two years
44 The senior manager of the audit firm has been performing the audit for at least two years
45 The overall client satisfaction with the audit quality offered by audit firms
Pilot study
A pilot study serves to test a questionnaire on a small group of respondents, aiming to identify and mitigate potential issues, as highlighted by Malhotra (2004) This preliminary research enhances the reliability of the data collection instrument and ensures its appropriateness, according to Wong and Ko (2009).
To prepare for this study, a draft questionnaire was utilized to interview nine chief and general accountants from client firms, specifically those who interacted directly with the audit team during the 2012 financial year The selected client firms included both manufacturing and service sectors, encompassing local and foreign companies The audit firms represented in this study were Deloitte and Ernst & Young as Big4 representatives, Auditing & Consulting Co., Ltd as a top local firm, and Thuy Chung Audit Company as a small audit firm Respondents were asked to evaluate the appropriateness of the questionnaire for measuring each dimension of the AUDITQUAL model in Vietnam and to provide reasons for their assessments.
Based on feedback, 12 items were removed from the draft questionnaire, resulting in a final version of 33 items The deletions were due to respondents lacking information to answer certain questions or finding them inappropriate for measuring audit quality Duff (2004) developed measurement scales intended for three respondent groups—auditors, auditees, and investors—using the same questionnaire, which may lead to some items being relevant for one group but not for others Additionally, the questionnaire was created over a decade ago in a developed country, making some items potentially unsuitable for the current Vietnamese market The results of the pilot study are detailed in Appendix A.
Main study
This research focuses on companies in Vietnam that have received audit services from audit firms, specifically selecting those located in Ho Chi Minh City, Binh Duong Province, and Dong Nai Province for convenience.
A survey was conducted with 380 respondents, including chief accountants, general accountants, and CFOs who utilized audit services in 2012 Questionnaires were distributed via email to 250 individuals sourced from the State Securities Commission of Vietnam's database Additionally, auditors from firms in Ho Chi Minh City facilitated the process by delivering 130 questionnaires directly to their clients.
According to DeCoster (2004), the minimum sample size for statistical analysis should be at least five times the number of variables, with a minimum threshold of 100 participants to ensure reliable results This can be expressed as n > 0 and n ≥ 5k, where k represents the number of variables.
We have 33 variables in this research, thus, the minimum sample size required to run EFA is: n = 5 * 33 = 165 samples
Besides, the requested sample size for regression is more than 50+8m (Tabachnick, 2001) where m is the number of independent variables
Apply this formula for 7 independent variables in this research, we need 106 samples (nP+8*7) for a minimum sample size
This research involves 33 observed variables and 7 independent variables, requiring a minimum of 165 samples for exploratory factor analysis (EFA) and regression To meet this requirement, 380 surveys were distributed, resulting in 170 usable responses, which satisfies the necessary sample size.
The questionnaire consisted of two sections: the first focused on assessing audit quality and client satisfaction, while the second gathered demographic information about the respondents and their client firms This included details such as the duration of audit service usage, the industry of the business, total equity of the client firm, the respondent's position, and their work experience.
In 2012, a survey was conducted targeting finance and accounting professionals, including CFOs, chief accountants, general accountants, and auditors, who had experience working with audit firms The author distributed questionnaires in both hardcopy and digital formats, sending 130 hardcopy surveys directly and sharing a Google Doc link with 250 potential respondents from a database provided by the State Securities Commission of Vietnam To encourage participation, the author followed up with phone calls and emails, ultimately collecting 52 completed responses.
250 distributed online questionnaires and 125 responses over 130 delivered hardcopy questionnaires.
Data analysis method
A statistical package for social sciences (SPSS) version 20.0 was used to analyze the collected data Process of analysis is carried out as follows:
Firstly, descriptive statistics was performed to describe the general view of the sample characteristics
Cronbach’s Alpha was employed to assess the reliability of measurement scales and to remove unsuitable components A Cronbach’s Alpha value exceeding 0.60 signifies satisfactory reliability, as established by Nunnally & Bernstein (1994), while item-total correlations should be above 0.30 According to Leech et al (2007), specific guidelines for interpreting the Cronbach’s Alpha reliability coefficient are detailed in Table 3.4.
Table 3.4: Cronbach’s alpha reliability coefficient (Leech et al., 2007)
Cronbach’s alpha Internal consistency α ≥ 0.7 Excellent
Exploratory factor analysis (EFA) is employed to evaluate the validity of measurement scales, as outlined by Hair et al (1998) This process involves calculating factor loadings for each variable to determine its associated factor, with a threshold of 0.40 for significance Consequently, any items with factor loadings below this threshold should be excluded from the scale to ensure accuracy and reliability (Clack & Watson).
The KMO measure is essential for assessing the suitability of Exploratory Factor Analysis (EFA), with a recommended value above 0.70, while values below 0.50 indicate inadequacy (Leech, Barrett, and Morgan, 2005) Additionally, the Bartlett test must yield a significance value of less than 0.05, confirming sufficient correlation among variables for factor analysis Eigenvalues also serve as a standard criterion for determining the number of factors to retain in the analysis.
In our analysis, we included only those factors with Eigenvalues exceeding 1.0, as values below this threshold indicate that the factors provide less explanatory power than individual items (Leech, Barrett & Morgan, 2005) Additionally, we set a criterion that the total extracted variance must exceed 50% to be considered valid (Hair et al., 1998).
As suggested by Leech, Barrett, and Morgan (2005), multiple regression is suitable when analyzing the impact of two or more independent variables on a single normal (scale) dependent variable In this study, a multiple regression analysis was performed to assess the influence of various independent variables—derived from the exploratory factor analysis (EFA)—on client satisfaction, the dependent variable Pallant (2005) outlines specific conditions that must be met to validate the results of multiple linear regression.
• The sample size is n > 50 + 8m ( where m is the number of independent variables)
• No outliers are found or in case they are, no significant impact of outlier is found
• Normality and linearity should exist
The adjusted R squared value indicates how much of the variance in the dependent variable was explained by the model.
Conclusion
This chapter outlines the research methodologies employed in this study, consisting of four key sections: the development of the questionnaire, a pilot study to refine the final questionnaire, the main study itself, and the data analysis methods Additionally, the impact of various dimensions of audit quality on client satisfaction will be discussed in Chapter 4.
DATA ANALYSIS
Introduction
This chapter utilizes SPSS version 20 to examine the impact of audit quality dimensions on client satisfaction It is structured into four key sections: the first section provides a description of the sample, the second conducts a Cronbach's alpha reliability analysis, the third performs Exploratory Factor Analysis (EFA), and the final section applies multiple regression analysis to test the proposed hypotheses.
Sample description
This study gathered survey data from a convenient sample of 380 respondents Concretely, questionnaires were sent via email to 250 respondents, and distributed directly in hard copies to
A total of 130 individuals, including Chief Accountants, General Accountants, and CFOs, participated in the study After one month, 177 responses were collected through both online surveys and hard copies Ultimately, 170 valid responses were analyzed, as 7 were deemed invalid due to respondents selecting the same option for all questions Detailed sample characteristics can be found in Table 4.1 of the Appendix.
The samples shows that there are 4 companies using audit service of the audit company in
1 year (2,4%), 5 companies using audit service from the same audit company continuously in 2 years (2,9%), 14 companies using audit service continuously in 3 years (8,2%) and 147 companies using audit service continuously in over 3 years (86,5%)
In terms of business industry, there are 15 agriculture, forestry and fishing companies (8,8%), 81 industry and construction companies (47,6%), 74 trade and services companies (43,5%)
In 2012, the balance sheets of six companies showed total equity of under VND 10 million, representing 3.5% of the total, while 16 companies reported equity between VND 10-20 million, accounting for 9.4% Additionally, 14 companies had total equity ranging from VND 20-50 million, which made up 8.2%, and 50 companies recorded equity between VND 50-100 million, comprising 29.4% of the total equity distribution.
84 companies with above VND 100 million (49,4%)
Regarding position, 3 respondents are accountant (1,8%), 47 people are general
In the study, 36 respondents (21.2%) possess 3 to 5 years of experience in the accounting and finance sector, whereas 134 respondents (78.8%) have more than 5 years of experience This indicates that the participants are well-qualified to provide informed opinions on audit quality.
Reliability Analysis
To evaluate the reliability of the scales, Cronbach’s alpha coefficients were calculated for each variable A scale is considered reliable when the Cronbach’s alpha exceeds 0.60, and the corrected item-total correlation is greater than 0.30 If any item's corrected item-total correlation is negative or below 0.30, that item should be removed to ensure the scale's reliability.
The initial reliability analysis, presented in Table 4.2, reveals a Cronbach’s alpha score of 0.853 for the Reputation scales However, since the item labeled Reputation 8 has a corrected item-total correlation below 0.30, it is necessary to remove this item from the analysis.
The Empathy scales have Cronbach’s Alpha score unsatisfactory (0.554) because of the low corrected item-total correlation variable If we deleted item named Empathy 4, the Cronbach’s alpha will increase to 0.888
The item labeled Client_Service1 exhibits a negative corrected item-total correlation, resulting in a low Cronbach’s alpha of 0.560 for the Client_Service scales To improve the reliability of the scale, it is essential to remove this item and recalculate Cronbach’s alpha.
Table 4.2: Cronbach’s Alpha reliability results of first analysis
Scale Variance if Item Deleted
Cronbach's Alpha if Item Deleted Reputation: Cronbach’s Alpha = 0.853
After removing 3 items with low corrected item-total correlation, we performed reliability analysis again The final result of reliability analysis for 29 remaining variables was shown in table 4.3
Table 4.3: Cronbach’s Alpha reliability results of final analysis
Measures Number of items Cronbach's Alpha Status
The results indicate that the Cronbach’s alpha reliability test is satisfactory, with scores ranging from 0.786 to 0.894 Additionally, all corrected item-total correlations exceed 0.3, confirming that the AUDITQUAL scale is an effective tool for measuring dimensions of audit quality.
Exploratory factor analysis (EFA)
The author focused on testing the reliability and validity of the independent variables' measurements, as the dependent variable consists of only one measurement item Reliability was assessed using Cronbach’s alpha coefficient, while validity was examined through Exploratory Factor Analysis (EFA) EFA was employed to uncover the underlying factor structure of the observed variables without imposing any preconceived notions on the results, following the methodology suggested by Child (1990).
“principal component analysis” with rotation “Varimax”
Kaiser-Meyer-Olkin Measure of Sampling Adequacy .845
Extraction Method: Principal Component Analysis
Rotation Method: Varimax with Kaiser Normalization a Rotation converged in 6 iterations
The results of the Exploratory Factor Analysis (EFA) indicate a KMO value of 0.845, surpassing the 0.7 threshold, suggesting that the dataset is suitable for factor analysis Additionally, Bartlett’s Test shows a significance level of 0.000, which is below the 0.05 mark, confirming that the correlation matrix is not an identity matrix and that significant correlations exist between the variables These findings collectively affirm the appropriateness of the data for factor analysis.
EFA result proved the measurement scales of audit quality with 7 factors, including: Reputation (7 items), Capability (5 items), Client_Service (4 items), Expertise (4 items), Empathy
The research model identifies three independent variables: Responsiveness, Experience, and Expertise, each represented by three items Notably, the item labeled EXPERTISE3 exhibits a loading of 0.643 on the Expertise factor and a lower loading of 0.3 on the Experience factor Since the difference in factor loadings exceeds 0.3, this confirms the discriminant validity of the model, affirming that EXPERTISE3 is appropriately categorized under the Expertise factor due to its higher loading (Jabnoun, 2003).
The total variance extracted was 69.282%, exceeding the required threshold of 50%, as detailed in Appendix D: Total Variance Explained All items demonstrated satisfactory factor loading, with values greater than 0.5 Consequently, the results fulfill all criteria set by the exploratory factor analysis (EFA) method, leading to the conclusion that the seven identified factors are both acceptable and of practical significance.
Hypotheses testing
Before running multiple linear regression, we need to test the correlation between the dependent variable and each independent variable to assure that they really had the correlation
Table 4.5 Pearson Correlation coefficients between Satisfaction and other independent variables
SATISFACTION REPUTATION CAPABILITY RESPONSIVENESS EMPATHY CLIENT_SERVICE EXPERTISE EXPERIENCE
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)
According to Pallant (2011), Pearson correlation coefficients range from -1 to +1, with a value of 0 indicating no relationship between two variables, while values close to ±1 signify a very strong correlation In this study, the Pearson correlation coefficients among the variables were generally below 0.6, except for the correlation between Satisfactory and Experience, which exceeded 0.6 This indicates that there are indeed correlations present, suggesting a linear relationship between the independent variables and the dependent variable.
4.5.2 Testing assumptions of Multiple Regressions
The actual sample size of this research (170 samples) was larger than the minimum required sample size for multiple regression (106 samples) Hence, the sample size met the requirement
According to Pallant (2005), the standard cut-off points for identifying multicollinearity among independent variables are a Tolerance Value of 0.1 and a Variance Inflation Factor (VIF) value of 2.0 The coefficients table reveals that all independent variables have Tolerance values exceeding 0.1 and VIF values below 2.0, indicating the absence of multicollinearity in the analysis.
B Std Error Beta Tolerance VIF
The histogram presented in Appendix E indicates a reasonable normal distribution for all variables, with a mean close to 0 and a standard deviation of 0.979, confirming that the assumption of normality remains intact.
Normal P-P Plot figure in Appendix E is rather straight line from the bottom left to top the right indicated the linear relation between independent variables and dependent variable
As all the assumptions of multiple regression were met, the regression results was conducted further to test the research hypotheses
The multiple regression result of 7 independent variables and dependent variable with Enter method are as follows:
Std Error of the Estimate
Model Sum of Squares df Mean Square F Sig
Total 114.824 169 a Dependent Variable: SATISFACTION b Predictors: (Constant), EXPERIENCE, RESPONSIVENESS, CAPABILITY, EXPERTISE, CLIENT_SERVICE, EMPATHY, REPUTATION
The adjusted R square value of 0.665 indicates that seven independent variables—Reputation, Capability, Responsiveness, Empathy, Client Service, Expertise, and Experience—account for 66.5% of the variance in the dependent variable, Satisfaction, with a significant level of 0.000 as shown in the ANOVA table.
The analysis presented in Table 4.8 demonstrates that all seven independent variables—Reputation, Capability, Responsiveness, Empathy, Client Service, Expertise, and Experience—positively influence client satisfaction, with significance values below 0.05 Consequently, all hypotheses (H1 to H7) in this study are supported, indicating that enhancing these factors will likely lead to increased client satisfaction with audit services.
The analysis of standardized coefficients beta reveals that Experience has the most significant impact on client satisfaction, with a coefficient of β = 358 Following Experience, Capability shows a notable effect with β = 206, while Responsiveness, Expertise, Empathy, Client Service, and Reputation have lesser influences, with coefficients of β = 185, β = 151, β = 130, β = 121, and β = 115, respectively.
Discussion of research findings
The regression analysis in this thesis reveals that seven key dimensions of audit quality—reputation, capability, expertise, experience, responsiveness, client service, and empathy—are positively correlated with client satisfaction.
The experience of auditors significantly impacts client satisfaction, more so than their technical capabilities This is because both experience and competence are crucial for delivering high-quality audit services, ultimately enhancing client satisfaction According to Favere and Marchesi (2000), a more competent auditor is more likely to detect errors and irregularities in financial statements, leading to satisfactory outcomes for clients In Vietnam, auditors are required to have a relevant bachelor's degree and a Certified Public Accountant (CPA) designation, and audit firms provide ongoing training to ensure their staff possess the necessary skills However, Groveman (1996) highlights that audit failures often stem from inexperienced staff, emphasizing that even capable auditors can face challenges if they lack experience with specific clients.
Key dimensions of audit quality that influence client satisfaction include responsiveness, expertise, empathy, client service, and reputation Clients feel more satisfied when audit firms are responsive to their needs and understand their challenges Expertise plays a crucial role, as audit firms with specialized knowledge are better equipped to detect fraud and material misstatements Wooten (2003) notes that firms with multiple clients in the same industry gain a deeper understanding of unique audit risks, enhancing both audit quality and client satisfaction High service quality is essential; therefore, auditors must implement supportive processes, such as regular meetings with clients to address issues and providing guidance on accounting principles, to ensure excellent client service Additionally, a firm's reputation significantly impacts client satisfaction, as reputable audit firms are incentivized to deliver higher quality services, leading clients to prefer them for their audit needs.
The finding of this study is consistent with some previous study Yuniarti and Zumara
Research indicates that client satisfaction in auditing is significantly influenced by factors such as prior experience, industry expertise, responsiveness to client needs, and the quality of audit fieldwork Ismail (2010) emphasized the importance of auditor experience, commitment to quality, and knowledge in accounting and auditing, while also highlighting the role of empathy in enhancing client satisfaction Additionally, Abd-El-Salam, Shawky, and El-Nahas (2013) found that a firm's corporate image and reputation play crucial roles in client satisfaction These findings reinforce the positive relationship between various dimensions of audit quality and client satisfaction, particularly within the context of Vietnam.
Conclusion
In this chapter, data analysis was conducted using SPSS version 20, demonstrating satisfactory Cronbach’s alpha reliability and confirming the validity of the measurement through exploratory factor analysis (EFA) The multiple regression analysis supported all hypotheses, establishing a significant relationship between factors such as Reputation, Capability, Responsiveness, Empathy, Client Service, Expertise, Experience, and Client Satisfaction A summary of the hypothesis testing results is presented in Table 4.9 below.
Table 4.9: The summary of hypotheses testing results
There is a positive relationship between reputation of the audit firm and client satisfaction
There is a positive relationship between capability of the audit firm and client satisfaction
There is a positive relationship between expertise of the audit firm and client satisfaction
There is a positive relationship between experience of the audit firm and client satisfaction
There is a positive relationship between responsiveness of the audit firm and client satisfaction
There is a positive relationship between client service of the audit firm and client satisfaction
There is a positive relationship between empathy of the audit firm and client satisfaction
CONCLUSION AND IMPLICATION
Conclusion
This study aimed to explore the connection between client satisfaction and seven key dimensions of audit quality: Reputation, Capability, Expertise, Experience, Responsiveness, Client Service, and Empathy Utilizing Duff’s (2009) AUDITQUAL measurement, the research tested the hypothesis that each audit quality dimension positively influences client satisfaction Empirical results supported the theoretical framework outlined in Chapter 2, confirming that the proposed model was satisfactory.
The regression analysis in this thesis reveals that seven dimensions of audit quality—reputation, capability, expertise, experience, responsiveness, client service, and empathy—positively impact client satisfaction, with auditor experience being the most influential factor Following experience, the dimensions of capability, responsiveness, expertise, empathy, client service, and reputation also contribute to client satisfaction In Vietnam, audit clients prioritize auditors with prior experience relevant to their company Furthermore, clients value the auditor's capability to conduct audits effectively, responsiveness to their needs, and understanding of their demands Industrial expertise is a significant advantage for audit firms in meeting client expectations, while high-quality client service is essential for assurance Notably, reputation has the least impact on overall client satisfaction.
Managerial implications
This study confirms that seven key dimensions of audit quality—Reputation, Capability, Responsiveness, Empathy, Client Service, Expertise, and Experience—positively influence client satisfaction These findings carry significant implications for audit firms operating in Vietnam.
This study provides valuable insights for audit firms to understand the dimensions of audit quality that significantly influence client satisfaction It reveals that all seven dimensions of audit quality affect client satisfaction, with Experience having the most substantial impact, followed by Capability, Responsiveness, Expertise, Empathy, Client Service, and Reputation To enhance client satisfaction, audit firms should prioritize Experience and Capability by implementing regular training and development programs for auditors, facilitating experience exchange, and creating a database for sharing audit opinions Additionally, firms must focus on improving responsiveness to client needs, demonstrating industry expertise, showing empathy towards client challenges, ensuring high service quality, and maintaining a strong reputation Suggested strategies include conducting industry research to gain insights into clients' business environments and challenges, arranging regular client meetings to address their requirements, and upholding the highest standards of integrity and objectivity By enhancing these dimensions of audit quality, firms can ultimately boost client satisfaction.
Limitation and suggestion for future research
This study has certain limitations, primarily due to the data collection survey being restricted to Ho Chi Minh City, Dong Nai, and Binh Duong Province, focusing solely on clients of select audit firms Consequently, the findings may not accurately represent the entire financial market in Vietnam Future research should aim to survey a broader range of audit firms across the country to enhance the reliability and generalizability of the results.
Due to time constraints and challenges in accessing client firms, this research has a limited number of participants, which may affect the overall quality of the study To enhance the reliability of future research, it is essential to expand the sample size in the main study.
This study primarily examined client firms' perceptions and satisfaction levels regarding audit quality Audit firms interact closely with chief accountants, general accountants, and CFOs to provide insights on clients' financial positions for investors and shareholders Consequently, feedback from these stakeholders on audited financial statements is crucial in assessing whether audit quality aligns with market demands Future research should explore audit service quality from the perspectives of investors, shareholders, and fund managers, while also comparing the differences among these groups.
Abd-El-Salam, E M., Shawky, A Y., and El-Nahas, T (2013) explore how corporate image and reputation influence service quality, customer satisfaction, and customer loyalty within an international service company Their study highlights the mediating role of these factors, demonstrating that a strong corporate image can enhance service quality and, consequently, boost customer satisfaction and loyalty This research underscores the importance of maintaining a positive corporate reputation to foster long-term customer relationships.
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APPENDIX A: THE FINDINGS OF PILOT STUDY
Table 3.2: Deleted items in pilot study
10 The engagement partner has high ethical standards
Assessing the ethics of an engagement partner can be challenging, as it often relies on client perceptions However, adherence to ethical standards is mandatory for all engagement partners For instance, every engagement partner is required to complete a minimum of 8 hours of study on ethical standards annually Additionally, the principles of independence, integrity, and objectivity for engagement partners are outlined in the Vietnamese Audit Law of 2012 This underscores that compliance with ethical standards is uniform across all engagement partners.
15 The audit team staff operates to high ethical standards
Excluded The reason is the same with explanation of item 10 above Ethical standards compliance is not different for all audit team staff in any audit firm
16 The audit firm is skillful in devising accounting treatments that generate results management wishes to obtain
Audit firms are required to adhere to Vietnamese accounting standards, auditing standards, and regulatory compliance, making it nearly impossible for them to create accounting treatments that align with management's desired outcomes.
17 The audit firm is willing to provide detailed cost information
In the Vietnamese audit context, audit firms are unable to disclose detailed cost information, as most do not maintain a specific cost budget to calculate total proposed audit fees Sharing such detailed information could diminish their competitive advantage in pricing Furthermore, clients typically focus on the overall audit fee rather than the specifics of cost breakdowns, making detailed cost disclosures less relevant to their decision-making process.
19 The audit firm’s office is geographically close to the client
In today's world, accessing an audit firm's office is convenient due to advanced transportation options, making geographic location less significant for audit quality Additionally, clients can maintain regular communication with their audit firms through email and phone, ensuring effective collaboration.
21 There is a ‘good fit’ between the personality of the engagement partner and the finance director
Respondents lacked sufficient information to address this question but expressed confidence in audit firms' commitment to serving clients with objectivity and integrity Consequently, they argued that the compatibility between the engagement partner's personality and the finance director is not a suitable metric for assessing audit quality in terms of responsiveness.
22 The relationship between the engagement partner and finance director is relatively informal
Respondents indicated a longstanding relationship between the engagement partner and the finance director, but emphasized that this connection does not influence audit quality Consequently, this factor is deemed inappropriate for assessing audit quality.
23 Audit team staff creates the minimum of disruption so far as practically possible
Excluded due to it is difficult to understand and not reflect the important role in client perception about the responsiveness of client’s needs
32 The engagement partner and senior manager make frequent visits to the audit site for technical review
The lack of awareness among respondents regarding the roles of engagement audit partners and senior managers has led to their exclusion from the study In Vietnam, the audit sector faces significant challenges, resulting in the limited application of engagement audits within the industry.
34 There is frequent communication between the audit team and the audit committee
Excluded due to many audit firms in Vietnam do not have audit committee per se Thus, this item is not appropriate in Vietnam audit context
38 The engagement partner is subject to internal review during the audit by other partners of the audit firm
Excluded because respondents have no information about the internal activities of audit firm Through the perception of client firm, they do not care about this activity
40 The client has a knowledgeable and active audit committee
Excluded This item is difficult to understand and inappropriate to measure audit quality in Vietnam
Respondents proposed that it is impossible for client firm to have a audit committee and actually, they do not have
Table 3.3: Final questionnaire used in main study
1 1 The audit firm is highly competent
2 2 The audit firm operates to the highest standards of integrity
3 3 The audit firm has rarely been found negligent in litigation against it – alleging inadequate audit performance
4 4 The audit firm is objective
5 5 The audit firm is conscientious
6 6 The audit firm is credible to third parties
7 7 The audit firm enjoys a good reputation
8 8 The audit firm is independent of the board of directors
9 9 The engagement partner is highly competent
11 10 The engagement partner is actively involved in the engagement beginning with the initial planning and throughout the audit process
12 11 The engagement partner has financial statement users’ best interest at heart
13 12 The engagement partner is keen to understand what is happening within the client’s organization
14 13 The audit team staffs are highly competent
18 14 18 The audit firm is willing to be flexible when scheduling the timing of audit visits
20 15 20 The engagement is easily contactable
24 16 24 The audit team develops stringent time budgets for each audit area and expects people to meet them
25 17 25 The audit team provides the client with personal attention
26 18 26 The engagement partner provides the client’s finance director with individual attention
27 19 27 The engagement partner has the client’s best interests at heart
28 20 28 The engagement partner is pro-active and contributory (e.g suggests potential acquisition targets)
29 21 The audit firm regularly conducts client service review meetings
30 22 The engagement partner arranges regular meetings with the client’s key staff to identify issues of concern
31 23 The engagement partner regularly identifies examples of added value to the client
33 24 The audit team is willing to provide guidance on accounting principles
35 25 There is frequent communication between the audit team and executive management
36 26 The audit firm has other clients in the same industry
37 27 The audit firm undertakes research into the client’s industry
39 28 The engagement partner is very knowledgeable about the client’s industry
41 29 The senior manager and manager assigned to the audit are very knowledgeable about the client’s industry
42 30 42 The engagement partner has been performing the audit for the past three years
43 31 43 The manager of the audit firm has been performing the audit for at least two years
44 32 44 The senior manager of the audit firm has been performing the audit for at least two years
45 33 The overall client satisfaction with the audit quality offered by audit firm
My name is Hoang Thi Kim Thuan, a student of MBA program at International School of
Business (ISB) – University of Economics Ho Chi Minh City I am conducting the research on the effects of audit quality offered by audit firm on client satisfaction
This questionnaire aims to gather your feedback on the quality of audit services and your satisfaction with the audit firm in 2012 Your input is crucial for the completion of this study.
Sincere thanks for the support of Ladies and Gentlemen
Part I: Measurement of audit quality and client satisfaction
Please indicate the level of agreement of the following statement by ticking in the appropriate box corresponding to: 1- Strongly disagree, 2- Disagree, 3- Neutral, 4- Agree, 5- Strongly agree
1 The audit firm is highly competent 1 2 3 4 5
2 The audit firm operates to the highest standards of integrity 1 2 3 4 5
3 The audit firm has rarely been found negligent in litigation against it – alleging inadequate audit performance
4 The audit firm is objective 1 2 3 4 5
5 The audit firm is conscientious 1 2 3 4 5
6 The audit firm is credible to third parties 1 2 3 4 5
7 The audit firm enjoys a good reputation 1 2 3 4 5
8 The audit firm is independent of the board of directors 1 2 3 4 5
9 The engagement partner is highly competent 1 2 3 4 5
10 The engagement partner is actively involved in the engagement beginning with the initial planning and throughout the audit process
11 The engagement partner has financial statement users’ best interest at heart 1 2 3 4 5
12 The engagement partner is keen to understand what is happening within the client’s organization
13 The audit team staff are highly competent 1 2 3 4 5
14 The audit firm is willing to be flexible when scheduling the timing of audit visits 1 2 3 4 5
15 The engagement is easily contactable 1 2 3 4 5
16 The audit team develops stringent time budgets for each audit area and expects people to meet them
17 The audit team provides the client with personal attention 1 2 3 4 5
18 The engagement partner provides the client’s finance director with individual attention
19 The engagement partner has the client’s best interests at heart 1 2 3 4 5
20 The engagement partner is pro-active and contributory (e.g suggests potential acquisition targets)
21 The audit firm regularly conducts client service review meetings 1 2 3 4 5
22 The engagement partner arranges regular meetings with the client’s key staff to identify issues of concern
23 The engagement partner regularly identifies examples of added value to the client 1 2 3 4 5
24 The audit team are willing to provide guidance on accounting principles 1 2 3 4 5
25 There is frequent communication between the audit team and executive management
26 The audit firm has other clients in the same industry 1 2 3 4 5
27 The audit firm undertakes research into the client’s industry 1 2 3 4 5
28 The engagement partner is very knowledgeable about the client’s industry 1 2 3 4 5
29 The senior manager and manager assigned to the audit are very knowledgeable about the client’s industry
30 The engagement partner has been performing the audit for the past three years 1 2 3 4 5
31 The manager of the audit firm has been performing the audit for at least two years 1 2 3 4 5
32 The senior manager of the audit firm has been performing the audit for at least two years
33 The overall client satisfaction with the audit quality offered by audit firms 1 2 3 4 5
1 How long has your company used the financial statement audit service of the audit firm? a 1 year b 2 years c 3 years d Above 3 years
2 What is the business industry of your company? a Agriculture, forestry and fishing b Industry and construction c Trade and services
3 Total equity reflected in the Balance Sheet for the year 2012 of your company is: a Below VND 10 million b From VND 10 to 20 million c From VND 20 to 50 million d From VND 50 to 100 million e Above VND 100 million
4 What is your position in the company? a General Director b Director/ Chief Financial Officer c Chief Accountant d General Accountant e Accountant f Others
5 How many year have you worked in the financial/ accountant field? a From 1-2 years b From 3-5 years c Above 5 years
THANKS YOU VERY MUCH FOR YOUR SUPPORT
Tôi là Hoàng Thị Kim Thuận, học viên cao học tại Viện đào tạo quốc tế - Trường Đại học Kinh tế Thành phố Hồ Chí Minh Hiện tôi đang nghiên cứu đề tài "Ảnh hưởng của chất lượng dịch vụ kiểm toán đến sự hài lòng của khách hàng", nhằm tìm hiểu mối liên hệ giữa chất lượng dịch vụ kiểm toán và sự hài lòng của khách hàng.
