{"title":"Current Issues in Auditing: How We Are Advancing the Dialogue Between Academics and Practitioners","authors":"Denise Dickins, Keith Urtel","doi":"10.2308/ciia-10775","DOIUrl":"https://doi.org/10.2308/ciia-10775","url":null,"abstract":"","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48963348","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}
In this study, we examine the structure of the state auditor or equivalent function to determine the relationship with federal corruption convictions. Specifically, we explore whether differences in the responsibilities for (1) financial statement audits of state or local governments (i.e., state audit function vs. private-sector auditor) and (2) fraud investigations through whistleblower programs within states are associated with federal corruption prosecutions within the state. We find that states’ efforts in the fight against corruption appear to be more effective where state audit functions are responsible for both financial statement audits and fraud investigations. We interpret our results as support for deterrence benefits achievable through state auditor functions’ active involvement in financial statement audits and fraud investigations.
{"title":"The Structure of State Auditor Functions in the Fight Against Corruption","authors":"Renee Flasher, Syrena Shirley, J. P. Higgins","doi":"10.2308/ciia-2020-044","DOIUrl":"https://doi.org/10.2308/ciia-2020-044","url":null,"abstract":"In this study, we examine the structure of the state auditor or equivalent function to determine the relationship with federal corruption convictions. Specifically, we explore whether differences in the responsibilities for (1) financial statement audits of state or local governments (i.e., state audit function vs. private-sector auditor) and (2) fraud investigations through whistleblower programs within states are associated with federal corruption prosecutions within the state. We find that states’ efforts in the fight against corruption appear to be more effective where state audit functions are responsible for both financial statement audits and fraud investigations. We interpret our results as support for deterrence benefits achievable through state auditor functions’ active involvement in financial statement audits and fraud investigations.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":"1 1","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-08-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41579164","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 article summarizes and reflects on the implications of the published study “Employee Satisfaction and Work-Life Balance in Accounting Firms and Audit Quality” (Khavis and Krishnan 2021), which examines the link between employee satisfaction, work-life balance, and audit quality within accounting firms. The study uses employee-level reviews from Glassdoor.com to examine how accounting firms are perceived by their employees, and tests whether accounting firms’ workplace characteristics explain employee satisfaction and audit quality. We briefly summarize the findings of this study and highlight relevant practical implications related to audit quality, employee recruitment, and employee retention, which may interest practitioners, regulators, and academics.
本文总结并反思了已发表的研究“会计师事务所员工满意度、工作与生活平衡与审计质量”（Khavis and Krishnan 2021）的含义，该研究考察了会计师事务所内部员工满意度、生活与工作平衡和审计质量之间的联系。这项研究使用Glassdoor.com上的员工层面的评价来检验员工对会计师事务所的看法，并测试会计师事务所的工作场所特征是否可以解释员工满意度和审计质量。我们简要总结了这项研究的结果，并强调了与审计质量、员工招聘和员工保留相关的实际意义，这可能会引起从业者、监管机构和学者的兴趣。
{"title":"PRACTITIONER SUMMARY Implications of Employee Satisfaction and Work-Life Balance in Accounting Firms","authors":"Joshua A. Khavis, J. Krishnan, Colin Tipton","doi":"10.2308/CIIA-2021-006","DOIUrl":"https://doi.org/10.2308/CIIA-2021-006","url":null,"abstract":"This article summarizes and reflects on the implications of the published study “Employee Satisfaction and Work-Life Balance in Accounting Firms and Audit Quality” (Khavis and Krishnan 2021), which examines the link between employee satisfaction, work-life balance, and audit quality within accounting firms. The study uses employee-level reviews from Glassdoor.com to examine how accounting firms are perceived by their employees, and tests whether accounting firms’ workplace characteristics explain employee satisfaction and audit quality. We briefly summarize the findings of this study and highlight relevant practical implications related to audit quality, employee recruitment, and employee retention, which may interest practitioners, regulators, and academics.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42428543","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}
Cryptocurrencies pose several risks that impact the inherent risk assessments of auditors. The SEC has issued warnings about the risks (Clayton 2017), and the PCAOB lists virtual assets as a key focus area in future inspections (Vincent and Wilkins 2020). This study examines how accounting professionals perceive the inherent risks associated with cryptocurrency based on their likelihood of occurrence and expected impact on financial statements. We find the risk of determining cryptocurrency value is perceived as having the highest likelihood of occurrence, and unauthorized private key access has the highest impact. Combining the evaluations of likelihood and impact, we rank the risk of ineffective exchange-level controls as having the highest inherent risk. We also find that inherent risk judgments are negatively correlated with cryptocurrency experience. Professionals with prior cryptocurrency experience, or who work for a company planning to process cryptocurrency transactions, rate inherent risk lower than those with less experience.
加密货币带来了一些风险，影响了审计师的固有风险评估。美国证券交易委员会已经发布了有关风险的警告(Clayton 2017)， PCAOB将虚拟资产列为未来检查的重点领域(Vincent and Wilkins 2020)。本研究考察了会计专业人员如何根据加密货币发生的可能性和对财务报表的预期影响来看待与加密货币相关的固有风险。我们发现确定加密货币价值的风险被认为是最有可能发生的，未经授权的私钥访问具有最大的影响。结合可能性和影响的评估，我们将无效汇率水平控制的风险列为具有最高固有风险的风险。我们还发现，固有风险判断与加密货币经验呈负相关。之前有加密货币经验的专业人士，或者在计划处理加密货币交易的公司工作的专业人士，认为固有风险比经验较少的人要低。
{"title":"Determining the Inherent Risks of Cryptocurrency: A Survey Analysis","authors":"Steven A. Harrast, Debra Ertel McGilsky, Yan Sun","doi":"10.2308/CIIA-2020-038","DOIUrl":"https://doi.org/10.2308/CIIA-2020-038","url":null,"abstract":"Cryptocurrencies pose several risks that impact the inherent risk assessments of auditors. The SEC has issued warnings about the risks (Clayton 2017), and the PCAOB lists virtual assets as a key focus area in future inspections (Vincent and Wilkins 2020). This study examines how accounting professionals perceive the inherent risks associated with cryptocurrency based on their likelihood of occurrence and expected impact on financial statements. We find the risk of determining cryptocurrency value is perceived as having the highest likelihood of occurrence, and unauthorized private key access has the highest impact. Combining the evaluations of likelihood and impact, we rank the risk of ineffective exchange-level controls as having the highest inherent risk. We also find that inherent risk judgments are negatively correlated with cryptocurrency experience. Professionals with prior cryptocurrency experience, or who work for a company planning to process cryptocurrency transactions, rate inherent risk lower than those with less experience.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42300987","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 Center for Accounting Education at Howard University partnered with public accounting firms, professional accounting associations, state CPA societies, and accounting academics to formulate recommendations to improve the advancement and retention of Black accounting professionals. Black accountants make up 9 percent of all U.S. accountants and auditors, but in public accounting firms they account for only 4 percent of professional staff and a mere 1 percent of partners (U.S. BLS 2019; AICPA 2019). An important indicator of the collaboration’s success is that public accounting firm leaders sought out its findings and are implementing its recommendations. This paper presents the formation, operation, and outcomes of the collaboration. It also describes the value each group gained from collaborating and provides recommendations for managing collaborations. Our descriptions are offered as a model for others to translate the results of academic research into industry action.
{"title":"Greater Than the Sum of Its Parts: Collaborating for Diversity","authors":"R. Dey, Lucy Lim, F. Ross, T. Walker, Ken Bouyer","doi":"10.2308/CIIA-2020-045","DOIUrl":"https://doi.org/10.2308/CIIA-2020-045","url":null,"abstract":"The Center for Accounting Education at Howard University partnered with public accounting firms, professional accounting associations, state CPA societies, and accounting academics to formulate recommendations to improve the advancement and retention of Black accounting professionals. Black accountants make up 9 percent of all U.S. accountants and auditors, but in public accounting firms they account for only 4 percent of professional staff and a mere 1 percent of partners (U.S. BLS 2019; AICPA 2019). An important indicator of the collaboration’s success is that public accounting firm leaders sought out its findings and are implementing its recommendations. This paper presents the formation, operation, and outcomes of the collaboration. It also describes the value each group gained from collaborating and provides recommendations for managing collaborations. Our descriptions are offered as a model for others to translate the results of academic research into industry action.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48197525","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}
Phebian L. Davis, Denise Dickins, J. Higgs, Joseph Reid
Despite efforts of the AICPA and public accounting firms, Black professionals remain underrepresented in public accounting. To better understand the experiences of Black accountants, we interviewed current and former auditors and collected their personal stories of inequality and microaggressions. We also collected the interviewees' suggestions about how to improve the retention of Black professionals. We hope these stories and suggestions help advance the diversity, equity, and inclusion (DEI) initiatives of public accounting firms. They can also be used by academics to stimulate discussions about DEI issues and motivate research.
{"title":"Auditing While Black: Revealing Microaggressions Faced by Black Professionals in Public Accounting","authors":"Phebian L. Davis, Denise Dickins, J. Higgs, Joseph Reid","doi":"10.2308/CIIA-2020-035","DOIUrl":"https://doi.org/10.2308/CIIA-2020-035","url":null,"abstract":"\u0000 Despite efforts of the AICPA and public accounting firms, Black professionals remain underrepresented in public accounting. To better understand the experiences of Black accountants, we interviewed current and former auditors and collected their personal stories of inequality and microaggressions. We also collected the interviewees' suggestions about how to improve the retention of Black professionals. We hope these stories and suggestions help advance the diversity, equity, and inclusion (DEI) initiatives of public accounting firms. They can also be used by academics to stimulate discussions about DEI issues and motivate research.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45807030","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}
: Public accounting firms continuously invest significant resources into enhancing audit quality. In this paper, we summarize Brown and Popova’s (2019) key findings related to public disclosure of audit quality indicators (AQIs) and discuss important implications for audit practitioners. Specifically, we discuss the current landscape of AQI disclosure from a regulatory and practitioner standpoint, and we provide recommendations for audit practitioners to consider when developing their own framework for AQI disclosure. Finally, we discuss how important stakeholder groups such as individual investors are influenced by AQI disclosures when making significant decisions concerning the audit firm (e.g., making auditor ratification decisions) and the audit client (e.g., making investment changes). The insights provided in our summary inform audit practitioners on how to showcase their audit quality enhancement efforts through voluntary AQI disclosure. SUMMARY: Public accounting firms continuously invest significant resources into enhancing audit quality. In this paper, we summarize Brown and Popova’s (2019) key findings related to public disclosure of audit quality indicators (AQIs) and discuss important implications for audit practitioners. Specifically, we discuss the current landscape of AQI disclosure from a regulatory and practitioner standpoint, and we provide recommendations for audit practitioners to consider when developing their own framework for AQI disclosure. Finally, we discuss how important stakeholder groups such as individual investors are influenced by AQI disclosures when making significant decisions concerning the audit firm (e.g., making auditor ratification decisions) and the audit client (e.g., making investment changes). The insights provided in our summary inform audit practitioners on how to showcase their audit quality enhancement efforts through voluntary AQI disclosure.
{"title":"Showcasing Audit Quality through Voluntary Public Disclosure of Audit Quality Indicators","authors":"Owen Brown, Velina K. Popova","doi":"10.2308/CIIA-2021-004","DOIUrl":"https://doi.org/10.2308/CIIA-2021-004","url":null,"abstract":": Public accounting firms continuously invest significant resources into enhancing audit quality. In this paper, we summarize Brown and Popova’s (2019) key findings related to public disclosure of audit quality indicators (AQIs) and discuss important implications for audit practitioners. Specifically, we discuss the current landscape of AQI disclosure from a regulatory and practitioner standpoint, and we provide recommendations for audit practitioners to consider when developing their own framework for AQI disclosure. Finally, we discuss how important stakeholder groups such as individual investors are influenced by AQI disclosures when making significant decisions concerning the audit firm (e.g., making auditor ratification decisions) and the audit client (e.g., making investment changes). The insights provided in our summary inform audit practitioners on how to showcase their audit quality enhancement efforts through voluntary AQI disclosure. SUMMARY: Public accounting firms continuously invest significant resources into enhancing audit quality. In this paper, we summarize Brown and Popova’s (2019) key findings related to public disclosure of audit quality indicators (AQIs) and discuss important implications for audit practitioners. Specifically, we discuss the current landscape of AQI disclosure from a regulatory and practitioner standpoint, and we provide recommendations for audit practitioners to consider when developing their own framework for AQI disclosure. Finally, we discuss how important stakeholder groups such as individual investors are influenced by AQI disclosures when making significant decisions concerning the audit firm (e.g., making auditor ratification decisions) and the audit client (e.g., making investment changes). The insights provided in our summary inform audit practitioners on how to showcase their audit quality enhancement efforts through voluntary AQI disclosure.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-05-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42204474","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}
{"title":"Preparing Auditors for the Blockchain Oracle Problem","authors":"Mark D. Sheldon","doi":"10.2308/CIIA-2021-007","DOIUrl":"https://doi.org/10.2308/CIIA-2021-007","url":null,"abstract":"","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-05-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45168606","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 reconciliation of audit evidence to the audit subject matter is a key and recurring audit procedure. Before reconciling information, data needs to be extracted from the audit subject matter, which is often in a Portable Document Format (PDF). Reconciliations are a recurring task for every new version of the audit subject matter. Large audit firms tend to “offshore” simple and repetitive audit tasks such as reconciliations to shared service centers. Offshoring however comes at the expense of coordination costs, delays in the process and challenges regarding the liability risk to the auditor. This paper presents an open-source algorithm to extract data from (draft) annual reports (PDF files) using Python to automate, rather than outsource, the data extraction for reconciliations. The algorithm resulted in a significant time saving for the audit of a large Dutch asset management firm. Researchers apply the algorithm to minimize hand-collection of financial statement data.
{"title":"Robotic Process Automation for the Extraction of Audit Information: A Use Case","authors":"Jeroen Bellinga, Tjibbe Bosman, S. Hocuk, Wim H.P. Janssen, Alaa Khzam","doi":"10.2308/CIIA-2020-043","DOIUrl":"https://doi.org/10.2308/CIIA-2020-043","url":null,"abstract":"The reconciliation of audit evidence to the audit subject matter is a key and recurring audit procedure. Before reconciling information, data needs to be extracted from the audit subject matter, which is often in a Portable Document Format (PDF). Reconciliations are a recurring task for every new version of the audit subject matter. Large audit firms tend to “offshore” simple and repetitive audit tasks such as reconciliations to shared service centers. Offshoring however comes at the expense of coordination costs, delays in the process and challenges regarding the liability risk to the auditor. This paper presents an open-source algorithm to extract data from (draft) annual reports (PDF files) using Python to automate, rather than outsource, the data extraction for reconciliations. The algorithm resulted in a significant time saving for the audit of a large Dutch asset management firm. Researchers apply the algorithm to minimize hand-collection of financial statement data.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-05-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42736987","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}
Frequent cyber-attacks on organizations in the last decade have caught the attention of practitioners and governance bodies, who have called for boards to take a more active role in managing and preventing future cyber risks. Governance surveys however, find that boards are not sufficiently prepared to address cyber security risks due to a lack of IT expertise. Firms have begun appointing technology experts, creating board level technology (IT) committees and delegating responsibilities to the audit committee as a means of managing cybersecurity risk. With the aim of understanding the current and future role of governance mechanisms in managing cybersecurity risks, this paper reviews the existing cybersecurity guidelines and regulations, and summarizes the empirical research related to corporate governance, security breaches, and IT expertise in overseeing cyber risks. Finally, we discuss implications for practice, policy and researchers.
{"title":"Academic Research on the Role of Corporate Governance and IT Expertise in Addressing Cybersecurity Breaches: Implications for Practice, Policy and Research","authors":"Carolin Hartmann, Jimmy Carmenate","doi":"10.2308/CIIA-2020-034","DOIUrl":"https://doi.org/10.2308/CIIA-2020-034","url":null,"abstract":"Frequent cyber-attacks on organizations in the last decade have caught the attention of practitioners and governance bodies, who have called for boards to take a more active role in managing and preventing future cyber risks. Governance surveys however, find that boards are not sufficiently prepared to address cyber security risks due to a lack of IT expertise. Firms have begun appointing technology experts, creating board level technology (IT) committees and delegating responsibilities to the audit committee as a means of managing cybersecurity risk. With the aim of understanding the current and future role of governance mechanisms in managing cybersecurity risks, this paper reviews the existing cybersecurity guidelines and regulations, and summarizes the empirical research related to corporate governance, security breaches, and IT expertise in overseeing cyber risks. Finally, we discuss implications for practice, policy and researchers.","PeriodicalId":44019,"journal":{"name":"Current Issues in Auditing","volume":" ","pages":""},"PeriodicalIF":0.8,"publicationDate":"2021-04-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47437720","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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