Constantinos Caramanis

Determinants of audit time as a proxy of audit quality

Purpose – The purpose of this paper is to examine auditor‐ and auditee‐related factors that determine audit time, as a proxy of audit quality. The issue of audit quality is of particular significance, while companies in Europe move towards adoption of international accounting standards.Design/methodology/approach – The paper compares the actual audit hours for corporate audits of listed companies with a minimum prescribed by the Supervisory Council of the Hellenic Institute of Certified Auditors (known in Greek with the acronym SOEL). The data used are from the period immediately preceding the implementation of SOELs minimum audit time criteria.Findings – An “audit effort” ratio calculated as actual hours to minimum hours prescribed is found to bear a positive correlation with company size and gearing, and is also significantly higher for companies audited by large multinational audit firms and for companies that seek equity finance. A proportion of audits is found to have been conducted at less than the...

Europeanisation, Independent Bodies and the Empowerment of Technocracy: The Case of the Greek Auditing Oversight Body

The establishment of independent oversight bodies constitutes an important institutional reform in the European Union context. Based on technocratic expertise, they aim to curtail the states policymaking and supervisory role. During the last decade, such bodies have been established in Greece, illustrating the ideational and institutional impact of the Europeanisation process. By examining the Greek independent oversight board for accounting and audit practices, we posit that its highly politicised mode of governance has undermined the purpose of its instigation and operation. Although such externally induced institutional reforms entail some ideational and institutional change, their full transformative potential has yet to be realised in Greece.

The pricing of statutory audit services in Greece

Abstract In this study, we investigate the determinants of corporate audit fees following the liberalization of the statutory audits market in Greece. Though the Greek statutory audits market is liberalized, it is relatively less matured, less competitive and, non- or less-litigious compared to those in the U.K. and U.S. Using data on fees paid to external auditors by 145 companies listed on the Athens Stock Exchange as of December 2000, we note that our results are similar to those of many prior studies conducted on matured, competitive, litigious audit environments. Specifically, we find that the size of an auditee, the number of hours spent on a particular audit engagement, the size of an audit firm and the financial condition of the auditee have positive and significant influence on the amount of fees charged by auditors. In addition, we find that auditor change has a significant negative effect on audit fees, especially in the large auditee segment of the market. Further, as our additional analysis shows, we document that audit fees and audit hours are endogenously related. We perform several sensitivity tests, the results of which suggest that our primary results are robust.

Accounting and Auditing Practices

Accounting and auditing are integral parts of wider management and business practices. Accounting provides the necessary information for making rational economic and business decisions, while auditing adds credibility to that information. The historical development of the institutions of accounting and auditing reflects the social, economic and political environment in each country and Greece is no exception.