Promoting Professional Skepticism in the Audit Environment PDF Download
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Author: Mary C. Parlee
Publisher:
ISBN:
Category : Auditing
Languages : en
Pages : 152
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Book Description
"The objective of this dissertation is to examine professional skepticism in the audit environment and identify methods to promote professional skepticism in an overall effort to improve auditor judgment and decision making. This dissertation is made up of three studies, and each study’s purpose, methodology, and findings are summarized below.
Author: Mary C. Parlee
Publisher:
ISBN:
Category : Auditing
Languages : en
Pages : 152
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Book Description
"The objective of this dissertation is to examine professional skepticism in the audit environment and identify methods to promote professional skepticism in an overall effort to improve auditor judgment and decision making. This dissertation is made up of three studies, and each study’s purpose, methodology, and findings are summarized below.
Author: United States Government Accountability Office
Publisher: Lulu.com
ISBN: 0359536395
Category : Reference
Languages : en
Pages : 234
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Book Description
Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future. The professional standards presented in this 2018 revision of Government Auditing Standards (known as the Yellow Book) provide a framework for performing high-quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve government operations and services. These standards, commonly referred to as generally accepted government auditing standards (GAGAS), provide the foundation for government auditors to lead by example in the areas of independence, transparency, accountability, and quality through the audit process. This revision contains major changes from, and supersedes, the 2011 revision.
Author: Carmen Olsen
Publisher: Springer
ISBN: 3319498967
Category : Business & Economics
Languages : en
Pages : 62
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Book Description
This book describes how auditors exercise different levels of professional skepticism and how they are exposed to different types of affective information on clients’ behavior. Based on the author’s empirical study of 56 auditors, it shows that auditors’ skepticism and affective reactions towards a client interact to influence their appraisal of valuation problems. It also suggests that the effects of auditors’ affective reactions on their skeptical judgments depend on the level of risk in the audit engagement.
Author: Kristina Yankova
Publisher: Springer
ISBN: 3658088710
Category : Business & Economics
Languages : en
Pages : 321
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Book Description
Kristina Yankova addresses the question of what role professional skepticism plays in the context of cognitive biases (the so-called information order effects) in auditor judgment. Professional skepticism is a fundamental concept in auditing. Despite its immense importance to audit practice and the voluminous literature on this issue, professional skepticism is a topic which still involves more questions than answers. The work provides important theoretical and empirical insights into the behavioral implications of professional skepticism in auditing.
Author: J. Owen Brown
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Auditing standards require auditors to maintain a skeptical mindset throughout an audit. However, research indicates that mindsets are flexible such that cognitive procedures (e.g., bolstering or providing counterarguments) activated when performing a particular task can carryover and influence subsequent task performance. We examine whether natural features within the audit environment, such as routine planning tasks, can create a mindset that influences evidence evaluation and skeptical judgments in a second, unrelated audit task. In an experiment, auditors who developed a counterarguing mindset during a planning meeting and subsequently evaluated internal control evidence potentially indicative of a significant deficiency (moderate severity) were more skeptical of management's explanation for the control deficiency and rated the deficiency more severe than auditors who initially developed a bolstering mindset. This effect diminished when the severity rose to potentially indicate a material weakness (high severity), as there were no differences in ICFR assessments between auditors who developed a counterarguing or a bolstering mindset. Path analyses confirm that the moderate severity condition processed client persuasive communications by utilizing a strategy consistent with previously developed mindsets which, in turn, influenced ICFR assessments. The high severity condition, instead, followed a content-focused processing strategy that focused on items indicative of increased risk which was invariant to the mindset condition. Thus, the flexibility of auditor mindsets can impact professional skepticism and have efficiency and effectiveness consequences under certain conditions. These results have implications for audit training and for improving regulators' understanding of why auditors do not always exhibit adequate skepticism.
Author: Porschia C. Nkansa
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
My dissertation focuses on examining the professional skepticism of internal auditors related to fraud risk assessment and environmental characteristics. The dissertation is comprised of three separate studies but the overall research question that is addressed is: How do certain environmental pressures affect the professional judgment (in this case, fraud risk assessment) and skeptical actions of internal auditors? The specific environmental factors examined in this dissertation are: (1) the level of coordination with external auditors, (2) a perceived conflict with legal counsel, and (3) the Chief Audit Executive's emphasis on professional skepticism. Each study consists of case materials (adapted from previous studies) with three parts: a fraud risk assessment, an indication of skeptical action, and personality trait questionnaires (including a professional skepticism scale). The results of this dissertation will be useful to audit committees, boards of directors, chief audit executives, corporate managers, external auditors, and regulators. The purpose of the first study is to investigate how the level of coordination with the external auditor affects internal auditors' fraud-related actions. Planned audit hours are the measure of skeptical action in this study. Prior research suggests that accountability strength influences auditor effort. The effect of external auditor coordination on internal auditors' planned audit hours has important implications for efficiency and perceived accountability to external stakeholders. Regulators and stakeholder organizations have encouraged more collaboration between external and internal auditors to improve efficiency and fraud detection. An experiment is conducted with 112 internal auditors to examine the theorized effects. The study uses a 2 x 2 between-subjects design and manipulates fraud risk (low or high) and external auditor coordination (low or high). Consistent with predictions, I find that internal auditors increase planned audit hours when fraud risk is high and that coordination moderates the relationship between fraud risk and hours. The results illustrate that although high external auditor coordination decreases internal auditors' hours (reflecting efficiency), internal auditors are more sensitive to responding to fraud risk when coordination is high (reflecting accountability).
Author: David Hay
Publisher: Routledge
ISBN: 1136210350
Category : Business & Economics
Languages : en
Pages : 387
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Book Description
Auditing has been a subject of some controversy, and there have been repeated attempts at reforming its practice globally. This comprehensive companion surveys the state of the discipline, including emerging and cutting-edge trends. It covers the most important and controversial issues, including auditing ethics, auditor independence, social and environmental accounting as well as the future of the field. This handbook is vital reading for legislators, regulators, professionals, commentators, students and researchers involved with auditing and accounting. The collection will also prove an ideal starting place for researchers from other fields looking to break into this vital subject.
Author: Jonathan H. Grenier
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
I develop a framework that elucidates how the primary target of auditors0́9 professional skepticism 0́3 audit evidence or their own judgment and decision making 0́3 interacts with other factors to affect auditors0́9 professional judgments. As an initial test of the framework, I conduct an experiment that examines how the target of auditors0́9 skepticism and industry specialization jointly affect auditors0́9 judgments. When working inside their specialization, auditors make more automatic, intuitive judgments. Automaticity naturally manifests for industry specialists as a result of industry experience, social norms to appear knowledgeable and decisive, and their own expectations to proficiently interpret audit evidence. Priming industry specialists to be skeptical of audit evidence, therefore, has little influence on their judgments. In contrast, priming such auditors to be skeptical of their otherwise automated, intuitive judgment and decision making substantially alters their decision processing. They begin to question what they do and do not know, in an epistemological sense and, as a result, elevate their overall concern about material misstatements due to well-concealed fraud. This pattern of results is consistent with my framework0́9s predictions and suggests that specialization is more about improving the interpretation and assimilation of domain evidence rather than enhancing reflective, self-critical thinking. It also suggests it would be beneficial to identify other factors that promote industry specialists0́9 skepticism towards their judgment and decision making to make them more circumspect about the possibility of management fraud (cf., Bell, Peecher, and Solomon 2005).
Author: Government Accounting Office
Publisher: www.Militarybookshop.CompanyUK
ISBN: 9781780397030
Category : Business & Economics
Languages : en
Pages : 242
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Book Description
Newly revised in 2011. Contains the auditing standards promulgated by the Comptroller General of the United States. Known as the Yellow Book. Includes the professional standards and guidance, commonly referred to as generally accepted government auditing standards (GAGAS), which provide a framework for conducting high quality government audits and attestation engagements with competence, integrity, objectivity, and independence. These standards are for use by auditors of government entities and entities that receive government awards and audit organizations performing GAGAS audits and attestation engagements.
Author: Luc Quadackers
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Although skepticism is widely viewed as essential to audit quality, there is a debate about what form is optimal. The two prevailing perspectives that have surfaced are 'neutrality' and 'presumptive doubt'. With neutrality, auditors neither believe nor disbelieve client management. With presumptive doubt, auditors assume some level of dishonesty by management, unless evidence indicates otherwise. The purpose of this study is to examine which of these perspectives is most descriptive of auditors' skeptical judgments and decisions, in higher and lower control environment risk settings. This issue is important, since there is a lack of empirical evidence as to which perspective is optimal in addressing client risks. An experimental study is conducted involving a sample of 96 auditors from one of the Big 4 auditing firms in the Netherlands, with experience ranging from senior to partner. One of the skepticism measures is reflective of neutrality (the Hurtt Professional Skepticism Scale - HPSS) whereas the other reflects presumptive doubt (the inverse of the Rotter Interpersonal Trust scale - RIT). The findings suggest that the presumptive doubt perspective of professional skepticism is more predictive of auditor skeptical judgments and decisions than neutrality, particularly in higher risk settings. Since auditing standards prescribe greater skepticism in higher risk settings, the findings support the appropriateness of a presumptive doubt perspective and have important implications for auditor recruitment and training, guidance in audit tools, and future research.
