ISE REVIEW

Opinions and Attitudes of Independent Auditors and Users of Audit Services Concerning Audit Quality 

Lerzan Kavut

Abstract

The level of accuracy and reliability in financial statements, is important for various decision makers. Due to the difficulties in accessing reliable information, reliability levels should be verified and approved. Independent audit is the process of verifying the reliability of financial statements and reporting the results. Getting the expected benefit out of independent audits depends on the quality of audit services.

Opinions and attitudes of independent auditors and individuals who are the managers of audited companies, the attributes of  audit quality, and differences of attitude are analyzed in this paper.

The survey covers managers of 313 publicly held companies operating in various sectors, whose operations have to be audited by independent auditors under the Capital Market Law No. 2499; as well as auditors employed at 56 audit companies under the framework of the same Law. Name of both the audited enterprises were included in the list received from Istanbul  Stock Exchange. (İstanbul Menkul Kıymetler Borsası, Halka Açık İşletmelerin Listesi, 2001, http://www.imkb.gov.tr/sirket.htm,  18.05.2001).

Survey results show significant differences between the opinions and attitudes of the two groups with respect to audit quality. These differences are seen mostly in the auditors level of experience and information concerning the sector and audited companies; due professional care in all audit steps i.e. from client selection to the formation of auditor opinion; management and personnel policies of the audit firm; audit firms’ technical facilities; litigation; quality of response to client expectations in areas other than the audit service; workforce planning; gathering evidence; acceptance and continuity of clients. 

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The 1994 Economic Crisis and Its Effects on Commercial Banks:

An Empirical Investigation 

İhsan Işık 

Abstract 

This paper analyzes the causes and consequences of the 1994 economic crisis. Utilizing Malmquist index, it also examines productivity change in Turkish banks between 1992 and 1996 to explore its effects on banking performance. The pre and post crisis results demonstrate that bank productivity followed a V-shape pattern: hitting a dramatic level in 1994 (-17%) and bouncing back after 1994 (+15%). The major source of the productivity fall was a downward shift in production frontier (technical regress) rather than increasing distance of banks from the frontier (efficiency decrease). The further analysis by ownership indicates that foreign banks suffered the most from the crisis while state banks suffered the least.

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