How Audit Reports Affect Audit Quality? The Moderating Effect of Auditor–client Relationship

Purpose: This paper aims to investigate whether audit reports contribute to Audit Quality (AQ) in the public sector and the potential role of auditor–client relationship in moderating this effect. Design/Methodology/Approach: The study used a survey research design from a sample of public sector auditors from Ghana’s Supreme Audit Institution (SAI), the Audit Service. A Conceptual framework was developed based on the International Auditing and Assurance Board’s (IAASB) Framework for Audit Quality (2014) and tested by using PLS-SEM method of analysis. Findings: The study found that audit reports positively contribute to audit quality in the Ghanaian Public Sector. However, the study revealed that auditor–client relationship negatively influenced audit quality. The paper further established that auditor–client relationship negatively moderated the relationship between audit reports and audit quality. Originality/Value: This is the first study that directly examines the contribution of audit reports to audit quality with auditor-client relationship as the moderating variable from a public sector perspective. Furthermore, the method and context of this study differ from prior research efforts.