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Article
Publication date: 8 January 2020

Jahanzeb Khan and Noel Harding

Motivated by ongoing calls for auditors to exercise an elevated level of professional skepticism, this paper aims to examine the relationship between basic human values…

Abstract

Purpose

Motivated by ongoing calls for auditors to exercise an elevated level of professional skepticism, this paper aims to examine the relationship between basic human values (values) and an underlying skeptical disposition (trait skepticism). Understanding the values that are associated with levels of trait skepticism will help in the design of audit environments that make the application of an underlying skeptical disposition more likely.

Design/methodology/approach

A survey was administered in which 140 postgraduate auditing students responded to the Schwartz value survey to measure the relative importance of different values, and the Hurtt trait skepticism scale to measure trait skepticism. The relative importance of the ten values was regressed against trait skepticism.

Findings

This study finds that the importance placed in the values of tradition and power, relative to other values, is negatively associated with levels of trait skepticism.

Research limitations/implications

The use of postgraduate auditing students as participants may limit the generalizability of the study’s findings.

Practical implications

Qualified by the need for future research to test the generalizability of the findings to an audit practitioner sample, the results of this study suggest that auditors with higher levels of trait skepticism may experience negative affect in environments that emphasize values of power and tradition. To the extent that current audit environments emphasize tradition and power, the results may help explain why trait skepticism is not consistently reflected in audit judgments and actions.

Originality/value

The affective implications of the environment within which auditors exercise professional skepticism is emerging as an important area by which to understand and improve audit quality. By identifying the values that those with a high skeptical disposition place relatively less importance in, this study informs an understanding of the circumstances where an underlying skeptical disposition is more or less likely to be reflected in auditor judgments and actions.

Details

Accounting Research Journal, vol. 33 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

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Book part
Publication date: 10 August 2005

Noel Harding, Sally Hughes and Ken T. Trotman

A recent change to audit workpaper review has been the movement toward delegating more review tasks to senior auditors and including more staff auditors in the review…

Abstract

A recent change to audit workpaper review has been the movement toward delegating more review tasks to senior auditors and including more staff auditors in the review process. This study investigates the efficiency and effectiveness implications of this change. It considers the calibration of reviewers of different levels of experience on both conceptual and mechanical errors. The results reveal that reviewers are miscalibrated (overconfident) in their workpaper error judgments. No differences are found in the calibration of staff and senior auditors across hierarchical level or type of error. The implications for audit effectiveness are discussed in the paper.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-0-76231-218-4

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Article
Publication date: 1 January 2000

Gordon Howitt and Noel Harding

This paper reports on the introduction of a scheme based on the principles of Supplemental Instruction into the accounting curriculum at the University of New South Wales…

Abstract

This paper reports on the introduction of a scheme based on the principles of Supplemental Instruction into the accounting curriculum at the University of New South Wales, Australia. Supplemental Instruction is argued to have a number of benefits which complement the traditional faculty facilitated lectures, tutorials and seminars. The scheme was introduced into the first course in accounting with a view to improving student performance, reducing withdrawal rates, and encouraging the development of communication and interpersonal skills. Qualitative and quantitative data was collected in order to understand how students perceived the scheme, and what effect the scheme had on student performance. The results suggest that the scheme has had a positive impact on student performance. In providing this account, we hope to assist accounting academics identify subjects where Supplemental Instruction might be of benefit to students, and the issues to consider when tailoring the program to the specific needs of the subject.

Details

Asian Review of Accounting, vol. 8 no. 1
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 26 August 2014

Yi Fei Gong, Sarah Kim and Noel Harding

The purpose of this paper is to investigate whether accountability pressure and ignorance with regard to the preferences and views of the superior are necessary…

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Abstract

Purpose

The purpose of this paper is to investigate whether accountability pressure and ignorance with regard to the preferences and views of the superior are necessary characteristics of the decision environment to effectively encourage pre-emptive self-criticism and elevate professional scepticism. Auditors continue to be called to account for a perceived lack of professional scepticism in the conduct of their audits. Pre-emptive self-criticism has been proposed as one means by which the level of professional scepticism exercised by auditors may be enhanced.

Design/methodology/approach

The role of accountability pressure and knowledge of the superior’s preferences in an experimental setting has been investigated, eliciting self-assessed measures of accountability pressure and manipulating whether the superior’s preferences were known or unknown. Judgements are made in the context of a preliminary analytical review setting.

Findings

It was found that greater application of pre-emptive self-criticism is associated with the presence of perceived accountability pressure, but only when the superior’s preferences are not known.

Research limitations/implications

Prior research reports that the effectiveness of prompts to be self-critical is limited. Findings suggest that pre-emptive self-criticism may be more effective in elevating professional scepticism than the findings of these studies suggest, and that the absence of an effect may be the result of low levels of accountability pressure in previous research settings. The results of this study imply that future research investigating pre-emptive self-criticism as a means of elevating professional scepticism should incorporate, as is the case in actual audit environments, accountability pressure in the decision setting.

Practical implications

Qualified by the need for further research, our study guides audit firms in their efforts to meet the expectations of regulators, oversight bodies, standard setters and the public at large for an elevated level of professional scepticism. Our findings suggest that placing auditors under accountability pressure might assist audit firms in meeting these expectations. Our findings also encourage auditors to exercise caution when making their preferences known to subordinates.

Originality/value

Despite its potential to help auditors meet demands for an elevated level of professional scepticism, pre-emptive self-criticism has received very little attention in the audit literature. Moreover, the few studies that have examined pre-emptive self-criticism find that prompts to be self-critical elevate professional scepticism in only limited circumstances. We make an original contribution towards an explanation for these findings, and guide future research by showing that accountability pressure is an important characteristic of the decision environment that should be in place before attempting to elevate professional scepticism through the encouragement of pre-emptive self-criticism.

Details

Managerial Auditing Journal, vol. 29 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

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Article
Publication date: 16 January 2007

Noel Harding and Mingchuan Ren

The aim of the research is to examine potential differences in the levels of ambiguity tolerance between Australian and Chinese accountants at the national, rather than…

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2795

Abstract

Purpose

The aim of the research is to examine potential differences in the levels of ambiguity tolerance between Australian and Chinese accountants at the national, rather than individual, level.

Design/methodology/approach

Ambiguity tolerance levels of final year accounting students (proxying for entry level accountants) and first year accounting students from Australia and China were measured using the MacDonald AT‐20 Ambiguity Tolerance Index. Comparisons were made across the four subject pools with a view to identifying national level differences suggested by the cultural, sociological, historical, and contemporary issues impacting on the accounting profession in the two countries.

Findings

Entry level accountants in China are less tolerant of ambiguity than their Australian counterparts. There are, however, no statistically significant differences in the levels of ambiguity tolerance between first year accounting students in China and Australia.

Research limitations/implications

The research employed final year accounting students as surrogates for entry level accountants. Future research could usefully extend this research to practicing accountants at different ranks.

Practical implications

Given the central role of ambiguity in contemporary accounting practice, the potential implications are broad. This is particularly the case with regard to the harmonization of accounting practices in that accountants with different tolerances for ambiguity might make different decisions in the face of similar accounting standards and circumstances. Interestingly, the results from the research suggest that differences in ambiguity tolerance are attributable to events occurring while students are studying.

Originality/value

This research examines ambiguity tolerance at the national level (rather than the individual level), thereby allowing practical implications to be prescribed.

Details

Asian Review of Accounting, vol. 15 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

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Book part
Publication date: 10 August 2005

Abstract

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-0-76231-218-4

To view the access options for this content please click here
Book part
Publication date: 10 August 2005

Abstract

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-0-76231-218-4

To view the access options for this content please click here
Article
Publication date: 19 November 2021

Shuk Ying Ho, Soon-Yeow Phang and Robyn Moroney

This paper aims to investigate the combined effect of two interventions, perspective taking and incentives, on auditors’ professional skepticism (hereafter skepticism…

Abstract

Purpose

This paper aims to investigate the combined effect of two interventions, perspective taking and incentives, on auditors’ professional skepticism (hereafter skepticism) when auditing complex estimates. Specifically, this paper examines the different ways that perspective taking (management versus inspector) and incentives (absent versus reward versus penalty) combine to impact skepticism.

Design/methodology/approach

This paper uses an experiment with 177 experienced Big 4 auditors. The experiment used a 2 (management vs inspector perspective) × 3 (absent vs reward vs penalty incentives) between-subjects design.

Findings

In the absence of incentives, adopting a management perspective raises situational skepticism when measuring skepticism as appropriateness of management’s fair value estimate while adopting an inspector perspective raises situational skepticism when measuring skepticism as need for more evidence. The authors find some evidence that incentives complement perspective-taking by enhancing those aspects of skepticism for which perspective-taking performs poorly. When assessing management assumptions, auditors adopting an inspector perspective enhance their skepticism more substantially than those adopting a management perspective, and this enhancement is greater with rewards than with penalties. However, this study does not detect an interaction between incentive type and perspective-taking on auditor skepticism in relation to gathering additional evidence.

Originality/value

This paper extends the literature by shifting the focus from a single perspective to a comparison of two perspective-taking approaches and discusses how each of these approaches enhances different aspects of skepticism. This paper also illustrates the importance of the interplay between perspective-taking and incentives in enhancing auditor skepticism.

Details

Managerial Auditing Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0268-6902

Keywords

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Article
Publication date: 1 July 1959

THE invitations which some 4,000 scientists and technologists accept every year to visit the National Physical Laboratory during the two Open Days in May are equally…

Abstract

THE invitations which some 4,000 scientists and technologists accept every year to visit the National Physical Laboratory during the two Open Days in May are equally available to such accredited representatives of industrial concerns as care to apply for them.

Details

Work Study, vol. 8 no. 7
Type: Research Article
ISSN: 0043-8022

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Article
Publication date: 1 May 1959

IN a recent address Mr. S. J. Noel‐Brown, a work study consultant who is frequently called in by local authorities, said that 209 such bodies, out of a total of 1,800, had…

Abstract

IN a recent address Mr. S. J. Noel‐Brown, a work study consultant who is frequently called in by local authorities, said that 209 such bodies, out of a total of 1,800, had shown a lively interest in the subject. Of these many used outside consultants or had joined in group schemes. Some authorities, however, were still living in the quill pen era, scarcely having heard of typewriters. They were struggling along with laborious, out‐of‐date equipment.

Details

Work Study, vol. 8 no. 5
Type: Research Article
ISSN: 0043-8022

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