While academic research has been conducted on auditors’ ability to exercise professional skepticism in face-to-face client interviews, little is known about auditors’ application of professional skepticism in email communication with the client. The purpose of this paper is to examine the factors that impact auditor professional skepticism during client inquiries conducted through email.
A 2 × 2 between-subjects experiment was conducted with 69 undergraduate and graduate auditing students as surrogates for auditors. The experimental design crossed two levels of client expressed confidence (high and low) and two levels of client response timing to the auditor’s email inquiry (earlier than expected and later than expected).
Results indicate that management expressed confidence moderates the influence of management response timing on auditor professional skepticism and that auditor perceptions of client credibility mediate this interactive effect. When the client’s response is low in confidence, auditors perceive a later-than-expected response from the manager as less credible than an earlier-than-expected response, which leads to less reliance on management explanations, which signifies more skepticism. However, when confidence is high, response timing does not impact perceptions of the client’s credibility.
The results imply that junior auditors should be vigilant of how communication cues in client emails may impact their judgments. Even though management response timing and expressed confidence should not influence auditor skepticism per se, auditors seem to vary their level of skepticism with the timing of the client’s response when client confidence is low but not when client confidence is high, despite the information content of the client’s response being held constant.
This study contributes to the literature on professional skepticism by addressing the Public Company Accounting Oversight Board’s concerns about the need for auditors to exercise more professional skepticism in practice, particularly in an environment in which computer-mediated communication is increasing at a fast pace; and assists practitioners in better understanding the factors that influence the degree of skepticism auditors exercise when collecting audit evidence through email. The study should be of interest to audit firms, as it provides evidence on whether auditors use nonverbal cues such as chronemics, or time-related messages, in email communication to judge management and evidence reliability and credibility.
The author is grateful for the help received from two anonymous reviewers, Melissa Carlisle, Timothy Fogarty, Anthony Bucaro, Jonathan Pyzoha, workshop participants at Case Western Reserve University and AAA conference participants, who provided feedback on earlier versions of this paper. The author would also like to thank the auditing professors who helped in obtaining participants for the study.
Zimmerman, A. (2016), "The joint impact of management expressed confidence and response timing on auditor professional skepticism in client email inquiries", Managerial Auditing Journal, Vol. 31 No. 6/7, pp. 566-588. https://doi.org/10.1108/MAJ-12-2014-1145Download as .RIS
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