Students' perceptions on auditing as a mechanism for enhancing the reliability and transparency in financial statements

Abstract

This thesis examines students' perceptions of auditing as an important function in enhancing reliability and transparency in financial statement. Further, it analyzes students' perceptions of auditing in the decision-making process, their level of understanding of the auditing function, and how auditor independence influences those perceptions. Mixed-methods approach is selected for this study as it allows to consider different ang. However, the study primarily uses online survey as the quantitative methods to gather data from students; qualitative methods are only employed to obtain expert insight to validate students' perceptions. The study is restricted to a subset of students who studied/study business management in their higher studies after 2003, and the research sample covered all continents except Antarctica. To provide a conceptual foundation and better understanding, agency theory, stakeholder theory, information asymmetry and positive accounting theory applied with the regulatory framework applicable for auditing. As it was not feasible in practice to get the same sample from each continent, the author decided to present the data focusing the two continents with the highest number of responses. The results indicates that students have a predominantly positive perception on the role of auditing in ensuring reliability and transparency of financial statements using demographical factors such as age, geographical location, and field of studies. Furthermore, the study emphasizes the critical role of auditor independence in forming these impressions. Students perceive that independent auditors play a vital role in financial integrity who create trust and confidence in the financial reporting process. Therefore, the topic was examined with two professionals in the subject, who provided feedback on how to improve student impressions. This thesis contributes to the current body of research by offering significant insights into future professionals' views regarding auditing, which will affect educational curricula and industry activities targeted at improving financial reliability and transparency.