Search results

1 – 10 of over 5000
To view the access options for this content please click here
Article
Publication date: 28 October 2021

Medhat Endrawes, Shane Leong and Kenan M. Matawie

This study aims to examine whether accountability and culture have an impact on auditors’ professional scepticism. It also examines whether culture moderates the effect of…

Abstract

Purpose

This study aims to examine whether accountability and culture have an impact on auditors’ professional scepticism. It also examines whether culture moderates the effect of accountability on auditors’ professional scepticism.

Design/methodology/approach

Three of the Big 4 firms in Australia and Egypt participated in an audit judgement experiment, which required them to indicate their beliefs about the risk of fraud and error at the planning stage of a hypothetical audit and evaluate the truthfulness of explanations provided by the client management. The authors examined whether their professional scepticism was influenced by accountability.

Findings

The results indicate professional scepticism differs significantly between cultures in some situations. The fact that culture influences scepticism suggests that even when auditors use the same standards (such as ISA 240 and ISA 600), they are likely to be applied inconsistently, even within the same firm. The authors, therefore, recommend that international bodies issue additional guidance on cultural values and consider these cultural differences when designing or adopting auditing standards.

Originality/value

To the best of the authors’ knowledge, this is the first study that examines whether culture moderates the impact of accountability on auditors’ professional scepticism using Egyptian and Australian (Middle Eastern and Western) auditors. Prior literature suggests that individuals subject to accountability pressure increase their cognitive effort and vigilance to detect fraud and error. As the authors find evidence that culture moderates accountability pressure and as accountability affects scepticism, they add to the literature suggesting that culture can influence professional scepticism.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 2014

Marietta Peytcheva

This paper aims to study the effects of two different types of state skepticism prompts, as well as the effect of the trait of professional skepticism on auditor cognitive…

Downloads
2873

Abstract

Purpose

This paper aims to study the effects of two different types of state skepticism prompts, as well as the effect of the trait of professional skepticism on auditor cognitive performance in a hypothesis-testing task. It examines the effect of a professional skepticism prompt, based on the presumptive doubt view of professional skepticism, as well as the effect of a cheater-detection prompt, based on social contracts theory.

Design/methodology/approach

Seventy-eight audit students and 85 practising auditors examine an audit case and determine the evidence needed to test the validity of a management's assertion in a Wason selection task. The experiment manipulates the presence of a professional skepticism prompt and the presence of a cheater-detection prompt. The personality trait of professional skepticism is measured with Hurtt's scale.

Findings

The presence of a professional skepticism prompt improves cognitive performance in the sample of students, but not in the sample of auditors. The presence of a cheater-detection prompt has no significant effect on performance in the student or auditor sample. The personality trait of professional skepticism is a significant predictor of cognitive performance in the sample of students but not in the sample of auditors.

Research limitations/implications

Results suggest that increasing the states of skepticism or suspicion toward the client firm's management may have no incremental effect on the normative hypothesis testing performance of experienced auditors. However, actively encouraging skeptical mindsets in novice auditors is likely to improve their cognitive performance in hypothesis testing tasks.

Originality/value

The study is the first to examine the joint effects of two specific types of state skepticism prompts, a professional skepticism prompt and a cheater-detection prompt, as well as the effect of the personality trait of professional skepticism, on auditor cognitive performance in a hypothesis-testing task. The study contributes to the literature by bringing together the psychology theory of social contracts and auditing research on professional skepticism, to examine auditors' reasoning performance in a hypothesis-testing task.

Details

Managerial Auditing Journal, vol. 29 no. 1
Type: Research Article
ISSN: 0268-6902

Keywords

To view the access options for this content please click here

Abstract

This research note investigates the relationship between the constructs of professional skepticism and client advocacy as they relate to accountants’ roles as auditors and tax professionals. Although Pinsker, Pennington, and Schafer (2009) implicitly treat advocacy and professional skepticism as opposing constructs, the purpose of this research note is to explicitly examine whether an accounting professional can be both a professional skeptic and a client advocate. Two hundred and six experienced accounting professionals with a mixture of accounting and tax backgrounds responded to a client advocacy scale (Pinsker et al., 2009) and a professional skepticism scale (Hurtt, 2010). Results indicate that while tax professionals have higher levels of client advocacy than auditors, both groups have similar levels of professional skepticism. Moreover, no correlation emerges between participants’ responses to the advocacy and the full professional skepticism scale or five of its six sub-scales. These results provide evidence that client advocacy is a separate and distinct construct from professional skepticism. These findings have implications for behavioral accounting researchers by demonstrating that these two constructs are not related; thus, it is important to separately measure client advocacy and professional skepticism when they are relevant to a research question.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-78350-445-9

Keywords

To view the access options for this content please click here
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…

Downloads
1675

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

To view the access options for this content please click here
Article
Publication date: 9 July 2018

Andi Kusumawati and Syamsuddin Syamsuddin

The purpose of this paper is to investigate the relationships between auditor quality to professional skepticism and between auditor quality and professional skepticism to…

Downloads
1751

Abstract

Purpose

The purpose of this paper is to investigate the relationships between auditor quality to professional skepticism and between auditor quality and professional skepticism to audit quality.

Design/methodology/approach

The analysis method to test the causal effect of auditor quality to profesional skepticism and audit quality. The respondent in this research is the auditor in the Audit Board of the Republic of Indonesia in South Sulawesi province using questionnaire. The analysis tool used in this research is partial least square.

Findings

The auditor quality has direct effect on the professional skepticism. Professional skepticism has direct effect on the audit quality. The auditor quality has no direct effect on audit quality, but auditor quality has indirect effect on audit quality with mediation of professional skepticism.

Originality/value

This paper shows a research was conducted about professional skepticism public sector in governmental sector for producing the audit quality, especially in South Sulawesi province in Indonesia. This research retests the research result from Aranya and Amernic (1981); Carcello et al. (1992); Behn et al. (1997); Copley (1998); Brown and Raghunandan (1995); Beasley et al. (2001); Chiu (2003); Suraida (2005); Lewinsohn et al. (1997); Novianti (2008); Varelius (2009). The researcher uses model combination (design) method of sequential explanatory based on evidentiary sequence from Creswell 2009, quantitative research (by instrument using questionnaire).

Details

International Journal of Law and Management, vol. 60 no. 4
Type: Research Article
ISSN: 1754-243X

Keywords

To view the access options for this content please click here
Article
Publication date: 4 April 2016

Christina Chiang

The purpose of this paper is to examine the direct linkage between professional scepticism and auditor independence.

Downloads
2960

Abstract

Purpose

The purpose of this paper is to examine the direct linkage between professional scepticism and auditor independence.

Design/methodology/approach

The study reviews the extant literature on professional scepticism, auditor independence, conflict of interest and unconscious bias.

Findings

Auditor independence is a fundamental antecedent to professional scepticism. However, auditor independence is impossible due to the auditor–client structure and conscious and unconscious personal bias. The threats to auditor independence are powerful incentives that reduce professional scepticism, making it difficult to exercise professional scepticism while making professional judgement.

Practical implications

An understanding of the direct link between professional scepticism and auditor independence is necessary to appreciate the context and meaning of professional scepticism in relation to the greater body of literature and ongoing concerns of audit regulators. This paper, which conceptualises the linkage between professional scepticism and auditor independence, provides a platform for future research to be conducted to examine the validity of the discussions and how a discourse in a moral framework embedded within accounting education may assist in improving auditor independence and professional scepticism.

Social implications

It is insufficient for audit regulators to assess professional scepticism by audit outputs. Threats to independence should be brought into the assessment. To ensure auditor independence is not compromised, auditors should be made aware of the ethical dimensions of their decisions and reminded constantly to monitor virtue ethics behaviours.

Originality/value

This paper brings into mainstream accounting and auditing literature and research a psychological perspective of auditor independence in the discussion of professional scepticism that is seldom examined.

Details

Pacific Accounting Review, vol. 28 no. 2
Type: Research Article
ISSN: 0114-0582

Keywords

To view the access options for this content please click here
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

To view the access options for this content please click here
Article
Publication date: 1 January 2013

Velina Popova

The purpose of this paper is to examine how levels of trait professional skepticism (i.e. professional skepticism based on personal traits) and different experiences with…

Downloads
4220

Abstract

Purpose

The purpose of this paper is to examine how levels of trait professional skepticism (i.e. professional skepticism based on personal traits) and different experiences with a specific hypothetical client (i.e. positive, negative, or none) affect audit judgments.

Design/methodology/approach

The paper is based on an experiment with auditing students, with one manipulated variable and one measured variable.

Findings

The results show that initial expectations are driven primarily by client experience except when none is present (then driven by trait), but the experience has greater influence on low trait skeptics. Participants who are more skeptical are more sensitive to fraud evidence at the evidence evaluation stage.

Research limitations/implications

The study uses student participants which reduces generalizability of the results to other populations. However, students are advantageous participants for examining pure trait skepticism unaffected by audit experience.

Originality/value

The paper examines audit judgments at multiple stages of the audit decision‐making process to determine the impact on each stage. The results of this paper support concerns that audit quality is affected both by trait professional skepticism and prior client‐specific experiences.

Details

Managerial Auditing Journal, vol. 28 no. 2
Type: Research Article
ISSN: 0268-6902

Keywords

To view the access options for this content please click here
Book part
Publication date: 16 October 2020

Michael K. Shaub

This chapter examines the relationship between four variables indicating ethical disposition – ethical sensitivity, ethical reasoning, concern for others, and egocentrism

Abstract

This chapter examines the relationship between four variables indicating ethical disposition – ethical sensitivity, ethical reasoning, concern for others, and egocentrism – and trait professional skepticism (PS) (Hurtt, 2010) among 119 first-year auditors. While there has been research addressing the link between ethical dispositional factors and state PS in auditors (e.g., Shaub & Lawrence, 1996), there is a lack of research into the link between ethical dispositional factors and trait PS (Hurtt, 2010). The results indicate that trait PS is higher in first-year auditors with higher levels of ethical reasoning, concern for others, and egocentrism. More ethically sensitive auditors do not demonstrate higher levels of trait PS, however. The results provide evidence that auditors’ ethical dispositions influence their ability to have the mindset necessary to carry out the investor protection role that requires adequate PS.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-83867-669-8

Keywords

To view the access options for this content please click here
Article
Publication date: 4 February 2021

Karen Mcbride and Christina Philippou

Accounting education is re-inventing itself as technology impacts the practical aspects of accounting in the real world and education tries to keep up. Big Data and data…

Abstract

Purpose

Accounting education is re-inventing itself as technology impacts the practical aspects of accounting in the real world and education tries to keep up. Big Data and data analytics have begun to influence elements of accounting including audit, accounting preparation, forensic accounting and general accountancy consulting. The purpose of this paper is to qualitatively analyse the current skills provision in accounting Masters courses linked to data analytics compared to academic and professional expectations of the same.

Design/methodology/approach

The academic expectations and requirements of the profession, related to the impact of Big Data and data analytics on accounting education were reviewed and compared to the current provisions of this accounting education in the form of Masters programmes. The research uses an exploratory, qualitative approach with thematic analysis.

Findings

Four themes were identified of the skills required for the effective use of Big Data and data analytics. These were: questioning and scepticism; critical thinking skills; understanding and ability to analyse and communicating results. Questioning and scepticism, as well as understanding and ability to analyse, were frequently cited explicitly as elements for assessment in various forms of accounting education in the Masters courses. However, critical thinking and communication skills were less explicitly cited in these accounting education programmes.

Research limitations/implications

The research reviewed and compared current academic literature and the requirements of the professional accounting bodies with Masters programmes in accounting and data analytics. The research identified key themes relevant to the accounting profession that should be explicitly developed and assessed within accounting education for Big Data and data analytics at both university and professional levels. Further analysis of the in-depth curricula, as opposed to the explicitly stated topic coverage, could add to this body of research.

Practical implications

This paper considers the potential combined role of professional qualification examinations and master’s degrees in skills provision for future practitioners in accounting and data analysis. This can be used to identify the areas in which accounting education can be further enhanced by focus or explicit mention of skills that are both developed and assessed within these programmes.

Social implications

The paper considers the interaction between academic and professional practice in the areas of accounting education, highlighting skills and areas for development for students currently considering accounting education and data analytics.

Originality/value

While current literature focusses on integrating data analysis into existing accounting and finance curricula, this paper considers the role of professional qualification examinations with Masters degrees as skills provision for future practitioners in accounting and data analysis.

Details

Accounting Research Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1030-9616

Keywords

1 – 10 of over 5000