Harmonization of the Auditor’s Report

Jagdish S. Gangolly State University of New York at Albany Mohamed E. Hussein University of Connecticut Gim S. Seow University of Connecticut

October 14, 1996

Revised, January 31, 1997
Revised, September 9, 1998

We acknowledge the use of foreign annual reports at Harvard University’s Baker Library, and the many hours that our research assistant K. Tam spent there. We would like to thank N. Barsky, M. Bongiovanni, T. Clausen, D. Dekadjevi, Y. Eisler, R. Fermin, F. Kapmeier, and H. Lee for their help with data collection, analyses, and translations into the English language. We are also grateful to the two anonymous referees and participants at the AAA/KPMG Peat Marwick International Accounting Research Conference and the accounting workshop at the University of Connecticut for their valuable comments and suggestions.

Harmonization of the Auditor’s Report
1. Introduction
The globalization of capital markets and the growth of international capital flows have heightened the significance of cross-national comprehension of corporate financial reports as well as the associated audit reports. The accounting literature is replete with assessments of the harmonization efforts and the international differences in the financial accounting area (Nair and Frank, 1981; Evans and Taylor, 1982; McKinnon and Janell, 1984; Doupnick and Taylor, 1985; Nobes, 1987; Archer, et. al., 1989; and Guenther and Hussein, 1995). However, there have been only three previous attempts to study the international differences and harmonization in the auditing area (Hussein, et. al., 1986; Archer, et. al., 1989; and Jones and Karbhari, 1996). The paper extends the work in the latter studies to study the impact on the harmonization of audit reports of International Audit Guideline (IAG) 13 that was issued in 1983 by the International Audit Practice