Auditor’s view of statement of cash flows auditing

Document Type : Research Paper

Authors

1 Ph.D. Student, Department of Accounting, Faculty of Management and Economics, Shahid Bahonar University of Kerman, Kerman, Iran.

2 Associate Professor, Department of Accounting, Faculty of Management and Economics, Shahid Bahonar University of Kerman , Kerman, Iran

3 Professor, Department of Accounting, Faculty of Management and Economics, Shahid Bahonar University of Kerman, Kerman, Iran

Abstract

This study was conducted to investigate the audit process of cash flow statements
by certified auditors of the stock exchange in Iran. The research was carried out using
the survey method by a structured questionnaire on a random sample of auditors, that
asks them about the importance of the statement of cash flows, the extent of auditing
its detailed components, and the use of specific financial ratios related to cash flows to
evaluate the company’s going concern hypothesis.The findings include spending the
least time auditing cash flow statements and disregarding cash flow ratios in assessing
the company’s going concern hypothesis, and show that auditors consider cash flow
statements to be the least important part of the financial statements during the annual
audit. Also, less than half of the auditors pay attention to specific issues such as the
need to present cash payments relating to capacity acquisitions by accounting
standards and the omitted material non-cash transactions from cash flow statements.
As a result, Auditors who spend the least time auditing cash flow statements, In
addition to increasing the moral hazard of their agency’srelationship with owners, they
may also reinforce agency problems in the traditional relationship between managers
and stakeholders.By carefully examining the auditors' views, the existing literature on
cash flow statement audit performance in Iran was expanded

Keywords

References

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History

  • Receive Date: 09 September 2022
  • Revise Date: 31 October 2022
  • Accept Date: 04 December 2022

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