Who’s Watching? Accountability in Different Audit Regimes and the Effects on Auditors’ Professional Skepticism

Florian Hoos*, Jorien Louise Pruijssers, Michel W. Lander

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)

Abstract

The European Commission has suggested that the use of joint audits should lead to improved auditor skepticism and—by extension—audit quality, through increased accountability. However, archival research does not find support for improved audit quality in a joint audit setting. To better understand the relationship between accountability in different review regimes and auditors’ judgments, we examine the behavioral effect of implementing a joint audit relative to other review regimes based on a 1 × 3 experimental design. Forty-seven senior auditors and partners from a Big Four firm performed a going concern evaluation task under one of three review regimes: the joint audit, the internal review, and the no review regime. Notwithstanding the difference in the audiences to which auditors are accountable, there is no difference in the judgment process. In terms of their judgment outcome, however, auditors in the joint audit setting were the least skeptical in their judgment of the going concern assumption. Overall, we suggest that the joint audit may lead to unintended behavioral consequences.

Original languageEnglish
Pages (from-to)563-575
Number of pages13
JournalJournal of Business Ethics
Volume156
Issue number2
DOIs
Publication statusPublished - 15 May 2019
Externally publishedYes

Bibliographical note

Publisher Copyright:
© 2017, Springer Science+Business Media B.V.

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