Measuring an audit quality climate among employees

Abstract

The International Standard on Quality Management requires, among other things, that audit firm leadership promotes a quality-oriented culture in firms. We add a novel contribution to the audit quality literature by developing an instrument to measure the audit quality climate in audit firms. Our data consisted of perceptions of non-executive employees at large South African audit firms and the Auditor-General of South Africa. Instrument development followed a rigorous scale development process, beginning with the adaptation of a widely used organizational climate measure to explore audit quality at employee level. Exploratory factor analysis determined six audit quality climate dimensions. Confirmatory factor analysis provided evidence of construct validity. The six dimensions of our audit quality climate measurement instrument fit into the three types of culture currently identified in audit firms. The findings of our study are a starting point to develop an acceptable audit quality climate scale for employees in audit firms.