FAR Newsletter: 4th FAR International Conference - press release

In this newsletter:

• Reflections on the 4thFAR International Conference – Press release
• FAR Masterclass Report of 29 March 2019 – “Judgment biases in auditing” by Anna Gold
• FAR Practice Note: “Ten considerations for conducting Root Cause Analysis in auditing” by Olof Bik
• FAR Academic board member Willem Buijink receives Hopwood prize FAR Vacancy: Program Coordinator

Reflections on the 4th FAR International Conference

4th International FAR Conference: The "human factor" plays a key role in audit quality

Breukelen, 14 June 2019 - The "ecosystem" of the entire financial reporting and assurance supply chain, in which an auditor has a role, largely determines the quality of the audit. The "human factor" plays a key role in this, according to the various studies presented at the 4th conference of the Foundation for Auditing Research (FAR) on 3 and 4 June. In the 5th research year of the FAR, the research results will be expanded further, with the aim of unlocking the "black box" of the drivers of audit quality and evidence-inform the professional development.

The FAR annual report 2018 was also presented during the conference. Among other things, the annual report provides an overview of current research and looks ahead to the presentation of research data from the studies that started in 2016 and will be completed this year.

The FAR recently obtained an ISAE3000 "type A" service organization report for their research data handling services as of April 26, 2019. This confirms that the FAR affiliated audit firms can share (anonymized / transformed) confidential data with FAR researchers and can rely on the existing FAR-CentERdata processes for the confidentiality of their data.This will help in the coming period to gain more research results into the factors that determine audit quality.

Please click here for the full press release.

Also, please find here the article on Accountant.nl regarding the FAR Conference.

FAR Masterclass report of 29 March 2019 – “Judgment biases in auditing”

Although auditors are well-educated professionals, they are also human beings. This means that they are susceptible to judgment biases. Departing from psychological theories, four judgment biases were discussed during Anna Gold’s well-attended masterclass: 

• Availability bias: the tendency to consider information that is easily retrievable from memory as being more likely, more relevant, and more important for a judgment.
• Anchoring bias: the tendency to insufficiently adjust away from an initial anchor.
• Overconfidence bias: the tendency to be overconfident in our judgment abilities.
• Confirmation bias: the tendency to seek and overweight confirming evidence. 

It cannot be stressed enough: awareness of the existence of these judgment biases is an important first step in reducing their negative effects!

For the full report, please click here.

FAR Practice Note:

• “Ten considerations for conducting Root Cause Analysis in auditing” - By Prof. dr. Olof Bik RA

Executive summary

Root cause analysis is an established process in a number of industries and is a developing area in the audit profession. This practice note speaks to the question of what constitutes root cause analysis specific to the auditing profession (as varying root cause analysis methods may potentially be more or less effective within the auditing context). For audit firms (large and small) wanting to apply root cause

analyses as part of their quality assurance systems, the practice note presents ten considerations that are relevant for effectively and efficiently producing root cause findings and recommendations concerning the improvement of audit quality.

To read the full practice note, click here (pdf)

FAR Academic board member Willem Buijink receives Hopwood prize

Professor Willem Buijink, professor at the Open University and Tilburg University (emeritus), has received the Anthony Hopwood Prize for 2019. The prize for academic leadership in accounting in Europe is awarded annually by the European Accounting Association (EAA).

For the full article please click here (in Dutch).

FAR Vacancy: Program Coordinator

The Foundation for Auditing Research aims to enhance the knowledge of what makes a good audit today and to continuously improve audit practices. The FAR pursues these objectives by researching the drivers of audit quality, by collaborating with other research institutes internationally, and by sharing its findings through research conferences and masterclasses. 

To help us achieve these goals, we are currently looking at hiring a: 

Program Coordinator 

As Program Coordinator of FAR you will implement the research and data collection activities of the FAR. More specifically, you implement and support the management of research projects entrusted to scientific research teams (national and international), cooperation with affiliated audit firms (in particular with regard to data collection) and data management in cooperation with an external organization. You also support in the organization of conferences, master classes and other events. 

Nyenrode Business Universiteit provides the management organization for the Foundation for Auditing Research (FAR). This management organization, consisting of a small team of around four people, is led by prof. dr. Olof Bik RA (Professor at Nyenrode and Managing Director of FAR) and prof. dr. Jan Bouwens (Professor at UvA and Managing Director of FAR) and is part of the broader program management team Accountancy at Nyenrode.

Do you want to be part of a compact and close-knit team on one of the most beautiful university campuses in the world? Click here for the full vacancy (in Dutch).