Oday Tamimi

Department of Accounting,

University of Debrecen,

Hungary

oday.tamimi@econ.unideb.hu 

ORCID 0000-0003-0517-2138

Financial engineering and its impact on audit efficiency in the opinion of experts

Ildikó Orbán

Department of Accounting,

University of Debrecen

Hungary 

orban.ildiko@econ.unideb.hu 

ORCID 0000-0001-7783-2201

Abstract. The present study aimed to examine the impact of financial engineering on audit efficiency by analyzing the results of a research sample that included banks, auditors, financial analysts, and academics in Europe, as previous studies did not examine the relationship between these variables. Three major findings are outlined in this study. First, there is a statistically significant relationship between financial engineering and audit efficiency based on the results of the tests of the hypotheses. Second, there is a statistically significant relationship between financial engineering and the quality of financial reports, as the use of financial engineering innovations leads to a decrease in the credibility and relevance of financial reports for users. Finally, there is a statistically significant relationship between financial engineering and the expectations gap in the audit process, due to the increased need for more details about the financial instruments in the auditor's report. The findings of this study are important for auditors, financial engineers, bank executives, and bodies that set standards for accounting and auditing.

Received: June, 2021

1st Revision: March, 2022

Accepted: May, 2022

DOI: 10.14254/2071-8330.2022/15-2/4

JEL Classification: G23, M41, M42

Keywords: financial engineering, audit, financial instruments, creative accounting, financial reportsfinancial engineering, audit, financial instruments, creative accounting, financial reports