Dutch Journal of Finance and Management

Dutch Journal of Finance and Management, 2022 - Volume 5 Issue 2, Article No: 22931
https://doi.org/10.55267/djfm/13675

Published Online: 20 Jan 2023

Views: 358 | Downloads: 176

This research examines the impact of accounting information systems (AIS) on audit quality in Lebanese SMEs. A sample of 123 respondents from Lebanese SMEs was used in the research. The data was collected through a survey questionnaire and analyzed using multiple regression analysis. The research findings indicate that AIS significantly positively impacts audit quality in Lebanese SMEs. Specifically, using AIS enhances the accuracy and reliability of financial information, improving the quality of the audit. In addition, the research reveals that several factors, such as the size of the SME, the level of internal control, and the level of accounting expertise, influence the effectiveness of AIS in improving audit quality. The results of this research have important implications for SMEs in Lebanon, as they suggest that using AIS can help improve audit quality and enhance the company's overall financial performance. Therefore, SMEs in Lebanon should invest in AIS to improve their financial reporting and enhance the quality of their audit. This research contributes to the literature on AIS and audit quality in SMEs, particularly in Lebanon. The findings highlight AIS's importance in improving audit quality and provide insights for SMEs in Lebanon to improve their financial reporting and enhance their overall financial performance.

Accounting Records Level of Accounting Information Accounting Systems

• Abdullatif, M., & Al-Rahahleh, A. S. (2020). Applying a new audit regulation: Reporting Key Audit Matters in Jordan. International Journal of Auditing, 24(2), 268–291. https://doi.org/10.1111/ijau.12192
• Agustina, F., Nurkholis, N., & Rusydi, M. (2021). Auditors’ professional skepticism and fraud detection. International Journal of Research in Business and Social Science (2147- 4478), 10(4), 275–287. https://doi.org/10.20525/IJRBS.V10I4.1214
• Alayli, S. (2022). The Impact of Internal Control Practices on Fraud Prevention: The Case of Lebanese Small-Medium Enterprises. European Journal of Business and Management Research, 7(5), 141-147.
• Alayli, S. (2023). The Impact of Capital Budgeting Practices on Financial Performance of Lebanese Banks. The EUrASEANs: journal on global socio-economic dynamics, (1 (38)), 29-39.
• Alberti, C. T., Bedard, J. C., Bik, O., & Vanstraelen, A. (2022). Audit Firm Culture: Recent Developments and Trends in the Literature. European Accounting Review, 31(1), 59–109. https://doi.org/10.1080/09638180.2020.1846574
• Baker, C. R., Cohanier, B., & Leo, N. J. (2017). Breakdowns in internal controls in bank trading information systems: The case of the fraud at Société Générale. International Journal of Accounting Information Systems, 26, 20–31. https://doi.org/10.1016/j.accinf.2017.06.002
• Berdiyeva, O., Islam, M. U., & Saeedi, M. (2021). Artificial Intelligence in Accounting and Finance: Meta-Analysis. NUST Business Review, 3(1), 56–79. https://doi.org/10.37435/nbr21032502
• Botha, L., & Middelberg, S. (2020). Corporate political activity as part of enterprstrategy in South African agribusinesses. South African Journal of Economic and Management Sciences, 23(1), 1–12. https://doi.org/10.4102/SAJEMS.V23I1.3219
• Brown, J. O., Lail, B. E., Macgregor, J. E., & Thomasson, T. (2020). Controls, payables, and materiality: A case of unknown collusion. Current Issues in Auditing, 14(1), A10–A30. https://doi.org/10.2308/ciia-52639
• Castro, P. R., Amaral, J. V, & Guerreiro, R. (2019). Adherence to the compliance program of Brazil’s anti-corruption law and internal controls implementation. Revista Contabilidade e Financas, 30(80), 86–201. https://doi.org/10.1590/1808-057x201806780
• Dinh, T., & Schultze, W. (2022). Accounting for R&D on the income statement? Evidence on non-discretionary vs. discretionary R&D capitalization under IFRS in Germany. Journal of International Accounting, Auditing and Taxation, 46. https://doi.org/10.1016/j.intaccaudtax.2022.100446
• Drábková, Z., & Pech, M. (2022). COMPARISON OF CREATIVE ACCOUNTING RISKS IN SMALL ENTERPRISES: THE DIFFERENT BRANCHES PERSPECTIVE. E a M: Ekonomie a Management, 25(1), 113–129. https://doi.org/10.15240/tul/001/2022-1-007
• Eaton, T. V, & Korach, S. (2016). A criminological profile of white-collar crime. Journal of Applied Business Research, 32(1), 129–142. https://doi.org/10.19030/jabr.v32i1.9528
• Fulop, M. T., Tiron-Tudor, A., & Cordos, G. S. (2018). Audit education role in decreasing the expectation gap. Https://Doi.Org/10.1080/08832323.2018.1527752, 94(5), 306–313. https://doi.org/10.1080/08832323.2018.1527752
• Fung, S., Pham, V. T., & Raman, K. K. (2022). Client corruption culture and audit quality: the conditioning effect of the competitive position of the incumbent auditor. Review of Quantitative Finance and Accounting, 59(3), 1133–1171. https://doi.org/10.1007/s11156-022-01072-w
• Grayston, C. (2022). Audit down but not out. International Journal of Auditing, 26(1), 8–11. https://doi.org/10.1111/ijau.12262
• Hamal, S., & Senvar, O. (2021). Comparing performances and effectiveness of machine learning classifiers in detecting financial accounting fraud for turkish smes. International Journal of Computational Intelligence Systems, 14(1), 769–782. https://doi.org/10.2991/ijcis.d.210203.007
• Hamza, I., & Shatila, K. (2022). The Effect of Gamification on Employee Behavior: The Mediating Effects of Culture and Engagement. The Journal of Asian Finance, Economics and Business (JAFEB), 9(5), 213-224.
• Handayani, Y. D., & Ibrani, E. Y. (2019). Corporate governance application, audit quality and audit report lag: The moderating role of law compliance. International Journal of Financial Research, 10(4), 164–171. https://doi.org/10.5430/ijfr.v10n4p164
• Harasheh, M., & Provasi, R. (2022). A need for assurance: Do internal control systems integrate environmental, social, and governance factors? Corporate Social Responsibility and Environmental Management. https://doi.org/10.1002/csr.2361
• Harber, M., & Marx, B. (2020). Auditor independence and professional scepticism in South Africa: Is regulatory reform needed? South African Journal of Economic and Management Sciences, 23(1). https://doi.org/10.4102/SAJEMS.V23I1.2912
• Hay, D., Shires, K., & Van Dyk, D. (2020). Auditing in the time of COVID – the impact of COVID-19 on auditing in New Zealand and subsequent reforms. Pacific Accounting Review, 33(2), 179–188. https://doi.org/10.1108/PAR-09-2020-0155
• Ishak, S., Nor, M. N. M., Shuib, M. S., Osman, A. F., & Saad, R. A. J. (2019). Corporate governance practice, risk management and internal control at Kedah State Zakat Board (LZNK). International Journal of Innovation, Creativity and Change, 6(2), 389–404.
• Jalloul, S., Awwad, G., & Shatila, K. (2022). The Impact of Accounting Information Systems on Bank Performance: The Case of Lebanon. Management and Economics Review, 7(3), 405-422.
• Kartini. (2015). Accountability mediation effect on internal control effect against fraud prevention (A study in the government of West Sulawesi, Indonesia). International Journal of Economic Research, 12(1), 195–204. https://www.scopus.com/inward/record.uri?eid=2-s2.0-84937675076&partnerID=40&md5=1a50fbbb8488667b0fa7e95f48b02cc1
• Kumar, V. R., Selvaraj, M., Venkateswaran, P. S., Sabarirajan, A., Shatila, K., & Agarwal, V. (2022). The impact of training and development programs on employees performance: the case of Lebanese SMEs. International Journal of Intellectual Property Management, 12(3), 368-381.
• Liao, L., Chen, G., & Zheng, D. (2019). Corporate social responsibility and financial fraud: evidence from China. Accounting and Finance, 59(5), 3133–3169. https://doi.org/10.1111/acfi.12572
• Lowe, D. J., Pope, K. R., & Samuels, J. A. (2015). An Examination of Financial Sub-certification and Timing of Fraud Discovery on Employee Whistleblowing Reporting Intentions. Journal of Business Ethics, 131(4), 757–772. https://doi.org/10.1007/s10551-013-2020-8
• Meiryani, Fitriani, N. A., & Habib, M. M. (2019). Can information technology and good corporate governance be used by internal control for fraud prevention? International Journal of Recent Technology and Engineering, 8(3), 5556–5567. https://doi.org/10.35940/ijrte.C5503.098319
• Millet-Reyes, B., & Uddin, N. (2021). Board structure changes after accounting fraud: the case of Schneider Electric. CASE Journal, 17(3), 406–418. https://doi.org/10.1108/TCJ-04-2019-0036
• Musa, N. (2019). A Conceptual Framework of IT Security Governance and Internal Controls. Proceedings of the 2018 Cyber Resilience Conference, CRC 2018. https://doi.org/10.1109/CR.2018.8626831
• Nyakarimi, S. N., Kariuki, S. N., & Kariuki, P. W. (2020). Application of internal control system in fraud prevention in banking sector. International Journal of Scientific and Technology Research, 9(3), 6524–6536. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85082953353&partnerID=40&md5=2975b270fa9ee4b73fb5b2dd3fd37be1
• Nyambuya, K., Yasseen, Y., & Soni, F. (2021). Barriers to the adoption of independent reviews by nonpublic interest entities in South Africa. African Journal of Business and Economic Research, 16(2), 185–206. https://doi.org/10.31920/1750-4562/2021/V16N2A9
• Oradi, J., Asiaei, K., & Rezaee, Z. (2020). CEO financial background and internal control weaknesses. Corporate Governance: An International Review, 28(2), 119–140. https://doi.org/10.1111/corg.12305
• Ozili, P. K., & Outa, E. R. (2018). Bank income smoothing in South Africa: role of ownership, IFRS and economic fluctuation. International Journal of Emerging Markets, 13(5), 1372–1394. https://doi.org/10.1108/IJoEM-09-2017-0342
• Ozili, P. K., & Outa, E. R. (2019). Bank earnings smoothing during mandatory IFRS adoption in Nigeria. African Journal of Economic and Management Studies, 10(1), 32–47. https://doi.org/10.1108/AJEMS-10-2017-0266
• Pilonato, S. (2022). Accounting can support a “sustainable” corruption network: a case analysis. Journal of Public Budgeting, Accounting and Financial Management, 34(1), 120–138. https://doi.org/10.1108/JPBAFM-11-2019-0172
• Pizzi, S., Venturelli, A., Variale, M., & Macario, G. P. (2021). Assessing the impacts of digital transformation on internal auditing: A bibliometric analysis. Technology in Society, 67. https://doi.org/10.1016/j.techsoc.2021.101738
• Prodanova, N. A., Trofimova, L. B., Bashina, O. E., Kachkova, O. E., Ilienkova, N. D., & Polyanskaya, T. A. (2019). Approaches for obtaining audit evidence at fair value measurement. International Journal of Economics and Business Administration, 7(3), 279–292. https://doi.org/10.35808/ijeba/325
• Rametse, N., Makara, T., & Santhariah, A. (2020). AN INVESTIGATION OF THE ATTITUDES OF BUSINESS TAXPAYERS TOWARDS THE MALAYSIAN GOODS AND SERVICES TAX AND ITS POTENTIAL MANAGERIAL BENEFITS. Journal of the Australasian Tax Teachers Association, 15, 115–141. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85112559394&partnerID=40&md5=304968dc06e129fd8b7b059feab6492e
• Rashid, M. A., Al-Mamun, A., Roudaki, H., & Yasser, Q. R. (2022). An Overview of Corporate Fraud and its Prevention Approach. Australasian Accounting, Business and Finance Journal, 16(1), 101–118. https://doi.org/10.14453/aabfj.v16i1.7
• Rendon, R. G., & Rendon, J. M. (2015). Auditability in public procurement: An analysis of internal controls and fraud vulnerability. International Journal of Procurement Management, 8(6), 710–730. https://doi.org/10.1504/IJPM.2015.072388
• Sarhan, A. A., Ntim, C. G., & Al-Najjar, B. (2019). Antecedents of audit quality in MENA countries: The effect of firm- and country-level governance quality. Journal of International Accounting, Auditing and Taxation, 35, 85–107. https://doi.org/10.1016/j.intaccaudtax.2019.05.003
• Shatila, K., & Alozian, M. (2019). Factors affecting employee turnover: the case of Lebanese retail companies. Journal of Human Resources, 7(2), 5-13.
• Solichin, M., Sanusi, Z. M., Johari, R. J., Gunarsih, T., & Shafie, N. A. (2022). Analysis of Audit Competencies and Internal Control on Detecting Potential Fraud Occurrences. Universal Journal of Accounting and Finance, 10(1), 171–180. https://doi.org/10.13189/ujaf.2022.100118
• Sulaiman, N. A., Jaffar, N., & Yahya, Y. (2022). Audit Rotation and Strength of Corporate Governance and its Effects on Audit Quality. Management and Accounting Review, 21(3), 71–89. https://doi.org/10.24191/MAR.V21i03-03
• Ushakov, D., & Shatila, K. (2021). The impact of workplace culture on employee retention: An empirical study from Lebanon. The Journal of Asian Finance, Economics and Business (JAFEB), 8(12), 541-551.
• White, S., Bailey, S., & Asenova, D. (2020). Blurred lines: exploring internal auditor involvement in the local authority risk management function. Public Money and Management, 40(2), 102–112. https://doi.org/10.1080/09540962.2019.1667682
• Yost, E., & Croes, R. (2016). Conditions associated with increased risk of fraud: A model for publicly traded restaurant companies. Journal of Hospitality Financial Management, 24(2), 92–109. https://doi.org/10.1080/10913211.2016.1236546

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.