5. Conclusions
Prior researchers have found that firms have incentives to purchase audits even in the absence of regulatory requirements to do so (e.g. Collis, 2012; Niemi et al., 2012; Ojala et al., 2016; Kausar et al., 2016). The aim of this synthesis was to identify and evaluate existing evidence on the attributes of voluntary audits. The conclusions of this synthesis provide insight into auditing practices, which are important, given the significance of auditing firms to the economy. The findings may also be beneficial to standard setters in assessing the impact of regulation on small businesses. Concerns over the cost of regulation on small businesses have grown in recent years (European Commission, 2010). Obtaining an understanding of the impacts of regulation on small businesses must begin with an understanding of the assurance or audit that would be purchased by firms in the absence of regulation. Therefore, the findings of this study yield insights into the various determinants that influence the demand for audit in the absence of regulation.
Prior research highlights the importance of audited financial statements to lenders. For instance, Kim et al. (2011) and Minnis (2011) find that private firms that undergo voluntary audits pay significantly lower interest rates on their debt than private companies without audits. This source of demand for external audits should be kept in mind by practitioners, standard setters, and policy makers. The present study suggests that lenders continue to rely on external auditors to serve a monitoring role. Voluntary auditing is closely related to audit exemption thresholds (Kamarudin, Zainal Abidin, & Smith, 2012; Lopéz Combarros, 2000). Therefore, from a policy perspective, the debate on whether to increase the audit exemption thresholds is never-ending.
