Professional skepticism profiles, effects on audit processes and outcomes, and the moderating role of audit firm culture. 01/10/2016 - 31/12/2020

Abstract

Regulators and standard setters have recently emphasized professional skepticism as a key input to audit quality (e.g., AFM 2014; PCAOB 2015; IFIAR 2015; IAASB 2015). The goal of this project is to understand the profile of auditors' professional skepticism, and to link that trait to audit judgments and decisions indicative of audit quality. Specifically, the proposed project seeks to provide answers to the following fundamental questions: (1) What is the profile of individual auditors' professional skepticism?; (2) How does professional skepticism affect the audit process and audit outcomes?; and (3) What role do audit firms' organizational conditions (e.g., firm culture) play in the application of professional skepticism on audit processes and outcomes? We make use of a well-established model in the literature on professional skepticism developed by Nelson (2009) and updated and expanded by Hurtt et al. (2013) as theoretical basis for understanding and predicting individuals' behavior. The model begins with evidential input, which includes information collected and considered during the audit. This, in turn, affects skeptical judgment, which is influenced by individual auditor characteristics (i.e., personality and individual differences), client and environmental factors (e.g., audit firm culture, financial incentives), and knowledge gained from experience and training. The outcomes of skeptical judgment can be captured in different ways (e.g., by assessing risk assessments or by examining materiality levels). Together, these judgments and characteristics affect skeptical actions (e.g., audit planning decisions, personnel allocation judgments, specialist consultations, and misstatement adjustment decisions). Skeptical actions then dictate evidential outcomes, which include evidence collection and evaluation, documentation, and audit reporting.The insights obtained from the project will not only be relevant for the academic community, but also for audit practice, standard setters, and regulators to better understand the profiles of individual auditor professional skepticism and the relationship between professional skepticism, the audit process, and audit quality.

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  • Research Project

Quality of financial reporting within the EU : impact of accounting standards, audit quality, corporate governance and regulation. 01/01/2006 - 31/12/2009

Abstract

Consistent with the title of the research proposal, the objectives of the research are to study the impact on quality of financial reproting within the EU of the new EU regulations on : (a) accounting standards; (b) corporate governance; (c) audit quality.

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  • Research Project

01/05/2002 - 30/09/2004

Abstract

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  • Research Project