Group of Factors Belonging to Auditing Firms Affecting the Quality of Financial Statement Audits

2.3.2.3. Professional expertise (professional expertise) of auditors/audit teams (Expertise)

This requirement requires auditors to have in-depth understanding of the risks, opportunities and accounting practices of clients in each specific industry sector (such as finance-banking, securities, manufacturing, trade). Auditors gain expertise (professional expertise) through their own efforts, self-improvement of knowledge about the client's industry during the audit process, and support for specialized training. This is very important, especially for audits of financial statements of listed companies, because most of the business sectors of listed companies are diverse, with complex transactions and items. The criteria for measuring the Expertise factor include:

- Ability to predict and identify opportunities and risks related to DNNY

- Ability to judge and detect material errors

- Ability to self-study and improve knowledge related to accounting, auditing and the fields in which customers operate.

Overall, the more professional expertise/professional expertise the auditor/audit team demonstrates, the more the audit quality will be guaranteed and improved, and this is often considered the most important factor influencing audit quality. In reality, the professional expertise of auditors/audit teams at Vietnamese auditing firms, especially at small and medium-sized auditing firms, is considered low [28]. Therefore, the professional expertise of auditors/audit teams is identified as an important factor influencing the quality of audits of financial statements of listed companies on the Vietnamese stock market today.

2.3.2.4. Auditing experience with clients of the auditor/audit team

(Experience)

Experience with clients is understood as the auditors have audited financial statements for clients before, or for many years, so they have a plan to conduct a more effective audit. Auditing experience with clients also shows that the auditor/audit team has been assigned to audit financial statements of listed companies operating in the same field where the auditor has a lot of knowledge and understanding of the client. The criteria for measuring this factor include:

- Experience in auditing financial statements

- Experience in auditing financial statements of enterprises in the same business line

The overall study shows that the auditor's experience is an important factor affecting the quality of the audit, and if the auditor demonstrates audit experience for clients, the quality of the audit of the financial statements of listed companies will be guaranteed and improved. The experience factor is also considered a condition for assessing whether the auditor is qualified to audit the financial statements of listed companies or not (Vietnam stipulates that auditors must have at least 2 years of experience in auditing). In fact, in Vietnam, when auditing is still considered young, auditors have little experience in the profession, the auditor's experience factor for clients is determined to have an important impact on the quality of the audit of the financial statements of listed companies on the current Vietnamese stock market [28].

2.3.2.5 Professional attitude (care, professional skepticism) of auditors/audit teams (Professional attitude)

Prudence requires auditors to act in accordance with the requirements of the audit of the financial statements of listed companies in a careful, thorough and timely manner in order to comply with the highest accounting and auditing standards. Professional skepticism requires audit team members to not accept the representations of the client's managers, financial experts or internal auditors, but to pursue their own investigations to evaluate these representations throughout the process of seeking audit evidence.

Professional skepticism and caution are two basic and mandatory factors for auditors/audit teams when conducting any audit of financial statements in general and financial statements of listed enterprises in particular. Accordingly, auditors must:

- Perform audit work with due care;

- Consider and weigh all aspects of the audit before giving an audit conclusion;

- Highly focused, adhere to professional standards in the audit;

- Conduct the audit with an attitude of professional skepticism;

- Assess the reliability of the explanations and documents provided by DNNY to a certain extent through a skeptical attitude;

- Suspecting the possibility of material errors in the financial statements, it is necessary to collect sufficient and valuable audit evidence.

The overall research shows that if auditors maintain professional skepticism and caution throughout the audit, it will help ensure and improve the quality of audits in general as well as audits of financial statements of listed companies. Therefore,

Professional attitude factor is identified as an important factor affecting the quality of auditing financial statements of listed enterprises on the current Vietnamese stock market.

2.3.2.6. Professionalism of the auditor/audit team when conducting the audit at the client (Professionalism)

When conducting financial statement audits at listed companies, auditors/audit teams must always ensure compliance with the company's auditing process, current accounting and auditing standards, and other professional regulations. Professionalism is demonstrated through the following criteria:

- Prepare a thorough and detailed audit plan;

- Arrange audit work reasonably and scientifically;

- Conduct audits flexibly and rigorously;

- Give accurate opinions on the audited financial statements of the enterprise;

- Advise SMEs on weaknesses and limitations in financial management and operations of the enterprise;

- Meet the expectations of the enterprise on audited financial statements.

In foreign studies, the Professional factor is often not considered the most important factor affecting audit quality. However, in Vietnam, this factor can have an important impact, so it will be included in the empirical survey, because auditors and audit firms are considered to lack professionalism, experience and are young in the profession, leading to audit quality being affected. Therefore, the Professional factor is determined to have an important impact on the quality of financial statement audits of listed companies on the Vietnamese stock market today, and if auditors/audit teams demonstrate professionalism when conducting a financial statement audit at a listed company, it will help ensure and improve the quality of the audit.

2.3.2.7. Awareness of compliance with professional ethics standards of audit team members (Awareness)

The auditor and each member of the audit team are committed to performing the audit with high ethical standards, such as ensuring confidentiality, professional conduct, integrity, objectivity, specifically the criteria for measuring the Consciousness factor include:

- Professional ethics

- Honest, objective and fair attitude

- Awareness of compliance with professional principles and regulations

Integrity requires being straightforward, honest and having clear opinions; Objectivity requires being fair, respecting the truth, being unbiased,

should not have relationships that lead to prejudice, favoritism; should not accept gifts that lead to prejudice, favoritism or professional scandal.

The overall study shows that the factor of auditors' awareness of complying with professional ethics is considered an important factor affecting the quality of financial statement audits. Due to the nature of auditing financial statements of listed companies, the audit team is often under pressure from management agencies, superiors, leaders or family relationships, personal relationships; being asked to do things that are contrary to professional standards, conflicts of loyalty to professional standards can easily arise, which can cause violations to be detected but not reported.

Confidentiality requires auditors to keep information about listed companies confidential not only during their working time but also after they have left the job. Due to the sensitive nature of information on listed companies' financial statements, especially at times of separation or merger, any information about listed companies that is disclosed can affect the company's stock price, so auditors are required to ensure information confidentiality according to professional regulations.

According to professional ethics regulations, confidentiality requires that information not be disclosed, including not being used for profit; Must ensure that subordinates and invited consultants also ensure confidentiality; Only provide or use information about customers and businesses with the consent of the customer or due to professional or legal requirements.

According to the results of quality control, the issue of professional awareness education for auditors at some auditing companies is not focused on at small-scale auditing companies, causing the audit quality to not meet the requirements [28]. Therefore, the Awareness factor is identified as an important factor affecting the quality of auditing financial statements of listed companies on the Vietnamese stock market today.

2.3.2.8. Seasonal audit pressure on auditors/audit teams (Pressure)

The overall study shows that pressure is considered an important factor affecting audit quality. According to current observations in Vietnam, due to the nature of auditing financial statements of listed companies, it is necessary to comply with the requirements for information disclosure on the stock market. If information is disclosed late, the listed company may be put under warning, special control, or delisted, while the financial statement auditing season

DNNY often concentrates at the end of the year and the beginning of the fiscal year - and in the middle of the 6-month fiscal year, which creates a lot of pressure for accountants. Accountants may be under pressure such as:

- Time from start to finish of audit

- Pressure from DNNY in issuing BCKiT

- Pressure from many customers in a certain period of time

- Pressure from the audit company's board of directors to complete audit documents and issue financial statements.

If auditors are under too much pressure due to the audit season, they may skip necessary audit procedures, thus affecting the audit quality. Therefore, the Pressure factor is identified as an important factor affecting the audit quality of financial statements of listed companies on the Vietnamese stock market today.

2.3.3. Group of Factors belonging to the auditing company

Overview of studies shows that the group of factors belonging to CTKT (Group

C) is considered important in determining the quality of each audit in particular as well as the quality of the entire company's operations. In fact, in Vietnam, the number of auditing companies is small (about 160 companies), of which only about 30-40 are qualified to audit the financial statements of listed companies. However, these auditing companies account for the majority of the market share, possessing a large proportion of professional auditors, especially at the Big Four. Compared to auditing companies operating for many years in developed economies such as the UK, the US, Australia, etc., Vietnamese auditing companies are assessed as very young, inexperienced, small-scale and have not yet built a reputation in the auditing market. Therefore, the following 5 factors with 18 criteria for measuring factors belonging to auditing companies are determined to have an important impact on the quality of auditing financial statements of listed companies on the Vietnamese stock market today (Diagram 2.3).

Size of Auditing Firms
	Reputation of Auditing Firms
		Group of factors belonging to the Auditing Company
	Company's working conditions for KTV/KT Team
		Audit fee / audit report completion time
			Audit firm quality control system

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Diagram 2.3: Group of factors belonging to the auditing company affecting the quality of financial statement audit

2.3.3.1. Size of Auditing Firms (Size)

The size of an auditing firm is reflected in measurement criteria including:

- Company history

- Customer size

- Size of staff and technicians

- Charter capital size.

The Big Four are large-scale auditing firms. According to many studies, audit scale affects audit quality, because large-scale auditing firms often have a team of professional auditors, have auditing experience and have better auditing conditions, leading to better and more assured audit quality. However, this also depends on many other factors, especially those related to the factor of professional ethics of auditors. Regulations in Vietnam (Decision No. 89/QD-BTC), to allow auditing firms to be qualified to audit financial statements of listed companies, consider the scale factor as the leading conditional factor, in which the minimum charter capital required is 2 billion VND (or 300,000 USD), the minimum number of auditors is 7 people with a minimum of 3 years of experience. According to practical observations, as well as the results of quality control at Vietnamese auditing firms, the audit quality at small-scale auditing firms is generally low. Auditing firm size is assessed based on criteria such as number of customers, business capital, revenue, number of employees and auditors. The study also concluded that audit quality at small-scale auditing firms often has a lower level of assurance than that of large-scale auditing firms [28]. Thus, the size factor is identified as an important factor affecting the quality of financial statement audits of listed companies.

2.3.3.2 Audit firm reputation (Reputation)

The reputation of an auditing company is reflected in the following measurement criteria:

- Reputation/name of the Auditing Company;

- Reputation, name of KTV

- Auditing company is a member of international firm;

According to many studies, more reputable auditing companies often have better quality financial statement audits. However, as with the scale factor, this is not entirely true and needs to be ensured by other factors. On the Vietnamese stock market, some listed enterprises tend to choose reputable and well-known auditing companies to audit their financial statements in order to increase the prestige of the enterprise with shareholders such as Vinamilk Joint Stock Company, FPT Joint Stock Company... Therefore, the factor

Reputation is identified as a factor affecting the quality of auditing financial statements of listed companies on the Vietnamese stock market today.

2.3.3.3 The Company's working conditions for Auditors/Audit Teams (Working conditions)

Consulting experts and synthesizing foreign studies, this is considered an important factor affecting the quality of auditing in general and auditing of financial statements of listed companies in particular. The working conditions of auditors/audit teams are reflected in the following measurement criteria:

- Professional auditing methods and tools: If the auditing company designs and applies a professional auditing method and tools, for example, a sample audit process suitable for each customer, a flexible sampling method, and professional financial statement collection techniques, it will help the auditor/audit team perform a better quality financial statement audit.

The current situation in Vietnam [28] shows that the construction of audit procedures (especially in-depth audit procedures) at small-scale audit companies is not good in all 3 stages:

i) Develop a specialized audit process; (ii) Update the specialized audit process; (iii) Instruct and apply the specialized process at the client. This will affect the quality of auditing the financial statements of listed companies on the current Vietnamese stock market.

- In addition, other criteria measuring the working conditions of auditors include: Convenient travel regulations for auditors/audit teams; Cultural environment in the audit firm; Personal working means of auditors/audit teams; Salary and bonus regime of auditors/audit teams are all criteria measuring factors identified as affecting the quality of financial statement audits of listed companies on the Vietnamese stock market today. If these criteria are more favorable, the quality of financial statement audits will be more guaranteed and improved.

2.3.3.4. Audit fee/time to complete BCKiT (Audit fee)

The overall research shows that, while the occupational pressure is stressful, occupational risks are high, and the requirement is still to fully comply with current standards and regulations, if the audit fee is low and the time to complete the financial statements is urgent, it will inevitably affect the audit quality.

According to the survey results on the quality of operations of accounting firms in Vietnam, the fees between accounting firms, mainly small-scale accounting firms, tend to be lowered to compete to attract customers, with the average fee of

The approved audit fee ranges from over 100 million VND to nearly 200 million VND. However, there is a huge difference in fees between audit firms, with contracts ranging from only 5-7 million VND/financial statement, resulting in low audit quality [28].

Therefore, the factors of Audit Fee and Time to Complete Financial Statements are identified as important factors affecting the quality of auditing financial statements of listed companies on the current Vietnamese stock market.

2.3.3.5. Audit firm's quality control system (Quality control)

The research overview shows that the quality control system, including the control environment, control policies and procedures as well as the organization and operation of control procedures for each audit and for the entire company of the audit firm, is a very important factor affecting audit quality.

According to the analysis results of the current situation of external quality control and the overall research, the important role of designing and operating internal quality control policies and procedures of the company is affirmed, therefore, it is identified as an important factor affecting the quality of financial statement audits of listed companies on the Vietnamese stock market today. The responsibility of quality control for the audit firm is:

- Auditors and audit firms must implement quality control policies and procedures for all audit activities of the audit firm and for each audit.

- Auditing organizations must develop and implement quality control policies and procedures to ensure that all audits are conducted in accordance with Vietnamese auditing standards or international auditing standards accepted by Vietnam in order to continuously improve the quality of audits.

To achieve the goal of controlling the quality of audit activities, VSA 220 stipulates that audit companies must apply a combination of policies: Compliance with professional ethics, professional skills and competencies, assignment of work, guidance and supervision, consultation, client retention and acceptance, and inspection.

In addition, quality control must be implemented for each audit contract, demonstrating: Auditors and assistant auditors must apply the company's quality control policies and procedures to each audit contract appropriately, including guidance, supervision, and inspection. The criteria for measuring factors include:

- Commitment to quality assurance before each audit;

- Focus on customer acceptance;