The Effect of Different External Audit's Approaches on the Readability of the Opinion Basis's Paragraph and Explanatory Paragraphs in the Auditor's Report -An Empirical Study on Egyptian Listed Companies

Document Type : Original Article

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Accounting and Auditing department Faculty of Commerce Alexandria University Egyptian

Abstract

The research aimed to study and test the effect of the different External Audit's Approaches on the level of readability in the audit reports, especially "the basis of modified opinion's paragraph", "Emphasis of Matter" or "Other Matter" Paragraphs, that the auditor can write without restrictions from Standards forms. The number of words, the number of financial Terminologies, and the average length of sentence have been used as proxies to measure the level of readability of an audit report paragraphs subject to test.
Based on a sample of companies listed on the Egyptian Stock Exchange over the period from 2014 to 2019, the research concluded that it is relatively difficult to read "basis of modified opinion paragraph" under dual audit approach, if compared with similar reports, according to single or joint audit approach.
On the other hand, the research concluded that it is relatively easy to read "Emphasis of Matter" or "Other Matter" Paragraphs under joint audit approach, if compared with similar reports, according to single or dual audit approach.

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