Recent research suggests that an auditor's choice to conduct audit inquiry via email versus in person can adversely impact both auditor and client behavior. In this study, I review recent research on this important topic, and I present additional survey-based evidence that describes how clients perceive auditor email versus in-person inquiries. I find that clients generally view auditors' in-person requests as more important and urgent than email requests, and clients feel they can more carefully craft their responses to support their company's preferred reporting position via email compared to in person. Further, clients expect that auditors will question an aggressive response more quickly in person than over email. Although audit partners have expressed concerns that email communication could impede auditor-client relationship building, I find no differences in how much clients like the auditor or in clients' willingness to work again with the auditor after receiving an email or in-person request. However, recent research suggests that email requests can lead to more negative feelings toward the auditor, which could affect the auditor-client relationship over time. I discuss implications for audit firms and provide suggestions for future research.
{"title":"Email versus In-Person Audit Inquiry: Recent Research and Additional Survey Data","authors":"Aaron Saiewitz","doi":"10.2308/CIIA-52267","DOIUrl":"https://doi.org/10.2308/CIIA-52267","url":null,"abstract":"\u0000 Recent research suggests that an auditor's choice to conduct audit inquiry via email versus in person can adversely impact both auditor and client behavior. In this study, I review recent research on this important topic, and I present additional survey-based evidence that describes how clients perceive auditor email versus in-person inquiries. I find that clients generally view auditors' in-person requests as more important and urgent than email requests, and clients feel they can more carefully craft their responses to support their company's preferred reporting position via email compared to in person. Further, clients expect that auditors will question an aggressive response more quickly in person than over email. Although audit partners have expressed concerns that email communication could impede auditor-client relationship building, I find no differences in how much clients like the auditor or in clients' willingness to work again with the auditor after receiving an email or in-person request. However, recent research suggests that email requests can lead to more negative feelings toward the auditor, which could affect the auditor-client relationship over time. I discuss implications for audit firms and provide suggestions for future research.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52267","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45891608","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This two-case set offers evidence of the need for and effectiveness of practice in evaluating evidence and auditing management estimates using both students and audit professionals. Participants must identify and evaluate confirming and disconfirming evidence for management's accrual for allowance for uncollectible accounts and warranty reserves. After practice and feedback in the first case, the second set offers added practice and measures skill improvement. The cases specifically target the perennial problem of “confirmation bias.” Responses from 51 auditing students and 53 auditors (from staff to partner) indicate these tasks are effective, realistic, and motivating.
{"title":"Super Shears: Micro Cases to Reduce Confirmation Bias in Evaluating Management Estimates","authors":"C. Sargent, Carol C. Bishop","doi":"10.2308/CIIA-52222","DOIUrl":"https://doi.org/10.2308/CIIA-52222","url":null,"abstract":"\u0000 This two-case set offers evidence of the need for and effectiveness of practice in evaluating evidence and auditing management estimates using both students and audit professionals. Participants must identify and evaluate confirming and disconfirming evidence for management's accrual for allowance for uncollectible accounts and warranty reserves. After practice and feedback in the first case, the second set offers added practice and measures skill improvement. The cases specifically target the perennial problem of “confirmation bias.” Responses from 51 auditing students and 53 auditors (from staff to partner) indicate these tasks are effective, realistic, and motivating.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52222","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45888176","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A perennial challenge in the accounting profession is how to aggregate and share instances of practitioner misconduct among numerous relevant parties. At present, both the American Institute of Certified Public Accountants (AICPA) and National Association of State Boards of Accountancy (NASBA) offer solutions for centralized collection of misconduct, but both likely experience issues with incomplete reporting from key constituents. I propose a novel use of blockchain technology to address this issue, such that all key parties in the accounting profession leverage an accountancy blockchain to aggregate and share instances of practitioner misconduct across the country on a nearly real-time basis. Such a network creates an immutable record of misconduct and allows key constituents in the accounting profession to work together and share information as peers without the risk of one party taking control of the ledger. I close by discussing blockchain-specific roadblocks to realizing this proposed model.
{"title":"Using Blockchain to Aggregate and Share Misconduct Issues across the Accounting Profession","authors":"Mark D. Sheldon","doi":"10.2308/CIIA-52184","DOIUrl":"https://doi.org/10.2308/CIIA-52184","url":null,"abstract":"\u0000 A perennial challenge in the accounting profession is how to aggregate and share instances of practitioner misconduct among numerous relevant parties. At present, both the American Institute of Certified Public Accountants (AICPA) and National Association of State Boards of Accountancy (NASBA) offer solutions for centralized collection of misconduct, but both likely experience issues with incomplete reporting from key constituents. I propose a novel use of blockchain technology to address this issue, such that all key parties in the accounting profession leverage an accountancy blockchain to aggregate and share instances of practitioner misconduct across the country on a nearly real-time basis. Such a network creates an immutable record of misconduct and allows key constituents in the accounting profession to work together and share information as peers without the risk of one party taking control of the ledger. I close by discussing blockchain-specific roadblocks to realizing this proposed model.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52184","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46366422","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Zachary T. Kowaleski, Nathan H. Cannon, A. Schnader, J. Bedard
Over the past decade, there have been significant changes to the regulatory environment for broker-dealer (BD) audits, as it shifted from private to public oversight. These changes unfolded in stages, from required PCAOB registration, to interim inspections under long-standing AICPA auditing and attestation standards, to proposal and finalization of new SEC and PCAOB standards, and finally to inspections under PCAOB auditing/attestation standards. This paper summarizes these events and their implications for both the auditing profession and BD audit quality, highlighting progress made, continuing issues, and research opportunities.
{"title":"The Continuing Evolution of Auditor Reporting in the Broker-Dealer Industry: Issues and Opportunities","authors":"Zachary T. Kowaleski, Nathan H. Cannon, A. Schnader, J. Bedard","doi":"10.2308/CIIA-52176","DOIUrl":"https://doi.org/10.2308/CIIA-52176","url":null,"abstract":"\u0000 Over the past decade, there have been significant changes to the regulatory environment for broker-dealer (BD) audits, as it shifted from private to public oversight. These changes unfolded in stages, from required PCAOB registration, to interim inspections under long-standing AICPA auditing and attestation standards, to proposal and finalization of new SEC and PCAOB standards, and finally to inspections under PCAOB auditing/attestation standards. This paper summarizes these events and their implications for both the auditing profession and BD audit quality, highlighting progress made, continuing issues, and research opportunities.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49168222","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The compensation structure of audit committee members has shifted over time to comprise greater proportions of equity and less cash. Practitioners and researchers debate what mixture of cash and equity compensation promotes audit committee objectivity and financial reporting quality. This article summarizes the current state of the audit committee compensation literature and discusses the implications of these findings for future researchers, practitioners, and regulators.
{"title":"The State of the Literature on Audit Committee Compensation and Its Implications for Practice and Research","authors":"Caroline Hayek","doi":"10.2308/CIIA-52177","DOIUrl":"https://doi.org/10.2308/CIIA-52177","url":null,"abstract":"\u0000 The compensation structure of audit committee members has shifted over time to comprise greater proportions of equity and less cash. Practitioners and researchers debate what mixture of cash and equity compensation promotes audit committee objectivity and financial reporting quality. This article summarizes the current state of the audit committee compensation literature and discusses the implications of these findings for future researchers, practitioners, and regulators.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":"1 1","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52177","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41736048","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
SUMMARY Changes in environmental forces provide an opportunity for audit firms to move away from an up front and reactive audit planning approach to one that is more agile. Agility involves quicker...
{"title":"Agility in Audit: Could Scrum Improve the Audit Process?","authors":"Richard I. Newmark, Gabe Dickey, William Wilcox","doi":"10.2308/CIIA-52148","DOIUrl":"https://doi.org/10.2308/CIIA-52148","url":null,"abstract":"SUMMARY Changes in environmental forces provide an opportunity for audit firms to move away from an up front and reactive audit planning approach to one that is more agile. Agility involves quicker...","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52148","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48254310","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
SUMMARY This case introduces students to nonfinancial measures (NFMs) and encourages thoughtful consideration and discourse surrounding their reporting and use by managers and auditors. NFMs are co...
{"title":"Disclosure and Audit Implications of Nonfinancial Measures: A Teaching Case","authors":"Matthew Hoag, Gabriel D. Saucedo","doi":"10.2308/CIIA-52147","DOIUrl":"https://doi.org/10.2308/CIIA-52147","url":null,"abstract":"SUMMARY This case introduces students to nonfinancial measures (NFMs) and encourages thoughtful consideration and discourse surrounding their reporting and use by managers and auditors. NFMs are co...","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52147","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47621794","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
SUMMARY Researchers have anecdotally noticed the decline in response rates from accounting professionals (particularly auditors) across time. We document the extent of this decline and analyze the ...
{"title":"Survey Nonresponse in the Auditing Profession: Trends and Recommendations","authors":"Porschia Nkansa, C. Bailey","doi":"10.2308/CIIA-52131","DOIUrl":"https://doi.org/10.2308/CIIA-52131","url":null,"abstract":"SUMMARY Researchers have anecdotally noticed the decline in response rates from accounting professionals (particularly auditors) across time. We document the extent of this decline and analyze the ...","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":"12 1","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52131","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42841826","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
SUMMARY Recent corporate scandals have raised concerns about the quality and value of the audit profession and have generated demands for improving auditors' evaluation of management integrity. The...
最近的公司丑闻引发了人们对审计职业质量和价值的担忧，并提出了改进审计师对管理诚信评估的要求。这个
{"title":"Assessing Management Integrity: Insights from Big 4 Auditors in Egypt","authors":"Rasha Kassem","doi":"10.2308/CIIA-52117","DOIUrl":"https://doi.org/10.2308/CIIA-52117","url":null,"abstract":"SUMMARY Recent corporate scandals have raised concerns about the quality and value of the audit profession and have generated demands for improving auditors' evaluation of management integrity. The...","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2018-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52117","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46549760","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
SUMMARY Auditors contend with an array of management personalities during the course of an audit engagement. Some clients by their nature are more likeable, while others create a stressful or unple...
{"title":"Client Likeability in Auditor Fraud Risk Judgments: The Mitigating Influence of Task Experience, the Review Process, and a “Consider the Opposite” Strategy","authors":"Brad A. Schafer, J. Schafer","doi":"10.2308/CIIA-52118","DOIUrl":"https://doi.org/10.2308/CIIA-52118","url":null,"abstract":"SUMMARY Auditors contend with an array of management personalities during the course of an audit engagement. Some clients by their nature are more likeable, while others create a stressful or unple...","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":"12 1","pages":"11"},"PeriodicalIF":0.8,"publicationDate":"2018-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2308/CIIA-52118","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45272244","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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