Meta-Analysis of the Relationship between Audit Expertise and Audit Tenure on Fraudulent Financial Reporting

Abstract

The present study aims to conduct a meta-analysis of the relationship between audit expertise and audit tenure on fraudulent financial reporting. This research is quantitative in terms of data type. The study population included all domestic and international articles and theses published on fraudulent financial reporting, totaling 771,305 in sixteen databases and two search engines during the period from 2002 to 2022. Ultimately, 18 studies that addressed the relationship between audit firm size and audit fees on fraudulent financial reporting were selected as the sample through purposive random sampling based on the inclusion and exclusion criteria. The selected studies were analyzed using CMA2 software, and heterogeneity of the studies was determined through Q-value, I-squared, and Tau-squared tests. The results showed that the effect size of audit quality and audit firm size were the most frequently cited variables influencing fraudulent financial reporting. Based on Cohen’s interpretive framework, this influence was evaluated as moderate, and this relationship was statistically significant (P≤0.05). Finally, using a tree diagram, studies with the least deviation from the random-effects model effect size were identified and recognized as more valuable research. Moreover, based on the fail-safe N test, it can be asserted that the impact of audit firm size on fraudulent financial reporting is negative and will persist for several years. Therefore, it can be concluded that precise and efficient auditing enhances investor reliability and consequently reduces the likelihood of fraudulent financial reporting. Hence, investors and other stakeholders should emphasize improving audit quality to ensure accurate financial disclosure and prevent fraudulent activities.