FAR Newsletter: Upcoming masterclass, data gathering efforts, the latest news about FAR research & publications

In this newsletter: 

• FAR Masterclass by Kris Hardies: "Professional Skepticism" on 9 October 2019
• Financial Statement Data Gathering Efforts
• Latest FAR practice notes and literature reviews: Do private firm audits serve a different purpose? (Literature review) / How is auditor commercialism related to audit quality and efficiency? (Literature review and practice note)
• Christian Peters starts PhD Research

FAR Masterclass by Kris Hardies: "Professional Skepticism" - 9 October 2019

Professional skepticism is high on the agenda of regulators and policy makers. In this masterclass, we will discuss the importance and difficulties of applying professional skepticism during an audit. We will also discuss potential ways to improve professional skepticism.

The FAR Masterclass is of interest to audit practitioners and firm management, auditing standard setters, audit supervisors, auditing students, auditing teachers and audit scientists. The masterclass is open to everyone working in the field of accountancy, free of charge and will be provided in English. Please feel free to share this invitation among fellow researchers or colleagues. 

Please note that registration is required to participate. Registration closes on 7 October 2019 (11 PM). Participants of the masterclass can apply for Dutch credits for permanent education (PE hours). 

For more info and registration, please visit our website. 

Financial Statement Data Gathering Efforts

FAR supports the audit firms as part of its data collection efforts with the collection of the financial statement data from sources such as the Dutch trade register, investor relations websites of listed companies, and AFM filings. Until the spring of 2019 most audit firms collected these data themselves. Some firms concluded that almost 70% of their data gathering efforts was invested in hand-collection of information from public data sources. Continue reading.

Latest FAR Practice notes and Literature reviews 

FAR regularly publishes new content to inform you about our latest research. Please look on our website for the latest additions to our publications section, which can be found here.

The following Literature reviews and practice notes have recently been published: 

Literature review: Do private firm audits serve a different purpose?

By Mahmoud Gad (Lancaster University), Robin Litjens (Tilburg University) and Jeroen Suijs (Erasmus University).  

While private firms dominate the market, existing audit research focusses primarily on listed firms where audit demand originates from external stakeholders such as shareholders assisting them in the monitoring of management. This is surprising as private firms represent a significant portion of the economy in most countries. Private firms generally face different incentives in terms of accounting and auditing demand. Institutional heterogeneity is large, varying from mandating audits for very few to all private firms. Furthering our understanding of internal value factors of private firm external audits and their effect on audit pricing, audit effort and audit quality is therefore relevant.

Read the complete literature review here. 

Literature review and practice note: How is auditor commercialism related to audit quality and efficiency?

By William Ciconte (University of Illinois at Urbana-Champaign), Justin Leiby (University of Illinois at Urbana-Champaign) and Marleen Willekens (KU – Leuven). 

While auditors are charged with serving an important societal function, they are also engaged in for-profit enterprises. This raises an important question: does engaging in commercial activity compromise auditors’ professionalism? Occupations which achieve professional status are expected to abide by a social contract wherein they serve as safeguards for the public good. Theory suggests that commercialism and professionalism are fundamentally opposed, and that emphasizing one will necessarily lead to a reduction in the other. In contrast to the claims of critics of the audit profession, other stakeholders including academics posit that commercialism and professionalism need not be mutually exclusive and could instead be complementary

What is missing from much of the research that discusses the trade-off between commercialism and professionalism is a careful discussion and empirical examination of quality control within audit firms.

Read the complete literature review here. A practice note is also available via this link. (opens in PDF)

Christian Peters starts PhD Research

An important goal of FAR is to stimulate and (co)facilitate PhD-research. Therefore, we announce with great pleasure that Christian Peters started as a PhD-researcher at Tilburg University on September 1st, with a (co)funding from FAR. His thesis supervisors are Bart Dierynck (professor of management accounting at Tilburg University) and Kathryn Kadous (professor of accounting at Emory University). During his studies, Christian has been working as a junior financial controller. Read the full interview here.

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