Audit quality is an essential part of the success of any business, especially small and medium-sized enterprises (SMEs). SMEs are often faced with the challenge of limited resources. Thus, efficient audit quality and audit practices are critical to their success. This review examines recent and not-recent empirical studies on audit quality and SMEs, discussing the importance of audit quality in SMEs and exploring the impact of various factors on audit quality.
Corporate governance aspects and internal and external audit processes have been shown to impact audit quality. For example, Raak et al. (2019) evaluated how audit market structure affected audit quality and cost in the SME-client category and discovered that market share diminishes price and quality rivalry. Similarly, Ernstberger et al. (2020) found that a small profit stream is associated with poor audit quality, particularly in medium-sized audit firms. Moreover, Nasrallah and El Khoury (2021) described an external audit as the primary assurance of financial reporting quality. It has been proven that audit quality is a crucial component of any business’s performance, particularly SMEs, and that efficient audit quality and processes are critical to their success.
Furthermore, studies have demonstrated that new digital technologies may assist SMEs. As such, Lugli and Bertacchini (2022) discovered that SMEs are better prepared to capitalize on developing digital technology. In turn, Chiarini et al.’s (2020) study found that auditing KPIs, monetary and economic indicators, and controlling improvement efforts are essential variables for improving SMEs’ quality performance. Finally, the analysis conducted by Crovini et al. (2020) demonstrated that rethinking risk management results in greater audit quality. Hence, digitization, corporate governance, and management can have an impact on audit quality in SMEs.
In conclusion, research has demonstrated that corporate governance issues, internal and external audit systems, and new digital tools can affect audit quality in SMEs. The review of recent empirical research on audit quality and SMEs highlighted the significance of audit quality in SMEs and investigated the influence of various factors on audit quality. These studies have shown that efficient audit quality and procedures are crucial to the success of SMEs.
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