Newsletter December 2021
24 December 2021
Want to be the first to know? Then don't forget to follow our LinkedIn page. Did you know that FAR also has a YouTube channel? Here you can find all of the FARview Podcasts.
In this newsletter:
- Recent publication
- NBA Webinar on 9 December 2021 on 'Continuity: our common interest'
- FAR Insights in 2021
- FARview #19 with Jonas Vandennieuwenhuysen on 'The auditor selection process' (Dutch)
- FAR team update - vacancy
- FRC publication on 'Audit Firm Culture: Challenge. Trust. Transformation. - A Collection of Perspectives'
- FAR Brown Bag Seminar on 11 March 2022
- Upcoming events – save the dates!
Recent publication:
FAR Research Paper - Bankruptcy and auditor's reporting in the Netherlands
The research team, consisting of Tjibbe Bosman, Merel van der Kuip and Wim Janssen, studied the reporting behavior of Dutch organizations subject to a statutory audit in the three years preceding their bankruptcy.
They found that only 12 percent of companies file timely audited financial statements or an exemption in the year prior to bankruptcy, and 56 percent (64) in the year two (three) prior to bankruptcy. Second, management discloses discontinuity risks in only 29 percent of pre-bankruptcy filings. And third, only 11 percent of organizations have a filed audit opinion for the fiscal year prior to bankruptcy.
However, for the majority (63 percent or 39 out of 62 cases) of the audit reports issued for the fiscal year prior to the bankruptcy, the auditor did not include a material going concern (GCO) in their audit report, and thus is a Type II GCO error (omission error).
The total Type II (I) GCO error rate is estimated to be 0.03 (99.26) percent of the audit reports issued.
NBA Webinar on 9 December 2021
The Netherlands Institute of Chartered Accountants (NBA) organized the webinar "Continuity: our common interest" on December 9, about the role of the external accountant in (dis)continuity of organizations.
During the NBA webinar, FAR colleague Tjibbe Bosman presented the results of the data analysis conducted on bankruptcies between 2012 and 2020. See also the previously mentioned publication 'Bankruptcy and auditors' reporting in the Netherlands' in this newsletter.
In addition, Tjibbe Bosman was interviewed about the study. Via the button below you can read the interview (Dutch).
The webinar can still be viewed (in Dutch), see the second button below this text. The third button leads you to the infographic.
The Continuity Working Group is a joint venture between the NBA, SRA and accountancy organisations and works on behalf of the Public Interest Steering Group on the above theme in the accountancy profession.
FAR Insights in 2021
Curious to find out what FAR did on knowledge dissimenation in 2021? Click the button below to find out!
FARview #19 with Jonas Vandennieuwenhuysen (Dutch)
FARview podcast number 19 is now online. In it you can watch and listen to PhD student Jonas Vandennieuwenhuysen (University of Antwerp) talking about his PhD research on the selection process of new auditors. His supervisors are Kris Hardies (University of Antwerp) and Marie Laure Vandenhaute (Vrije Universiteit Brussel).
The research focuses in particular on the auditor selection process after the introduction of mandatory office rotation. Jonas is still in the early stages of his research, but is now busy working on four case studies in which clients select a new auditor. The number of case studies will be expanded.
It is not yet possible to draw conclusions at this stage, but a few things are striking. For example, the transition to a new accountant is perceived as complicated, especially if, for example, existing advisory processes are affected by the change. "Companies won't do it for fun", says Jonas. Yet the positive aspects of a change are certainly seen. The people who are not directly involved in the drastic change processes generally mention this positive influence the most (for example, the 'fresh look' that is created by a change). Jonas also sees that the final choice for a new accountant is determined to a lesser extent by the audit committee than might perhaps be expected.
More info on this project (2020B01)
FAR team update - vacancy
As of the 17th of January, our colleague Merel van der Kuip will leave FAR to continue her career at NWO (Dutch Research Council). Merel has been working for FAR since early 2017. Over the course of the years, she has witnessed FAR developing into a professional service organization, in which she was mostly responsible for the coordination of Public Data Gathering. We would like to thank Merel for her contribution to FAR and wish her a lot of success in her new job.
Therefore, we are currently searching for a new FAR team member, the vacancy has been posted on our website.
Her tasks will be temporarily taken over by Jeanine Lemstra.
So, are you looking for a new job in a fun team? This is a great opportunity to make a difference in science and practice. If you would like to know more about this position, click on the button at the bottom of this text.
FRC publication on 'Audit Firm Culture: Challenge. Trust. Transformation. - A Collection of Perspectives'
In June 2021, the FRC held a virtual conference on 'audit culture'. This was an opportunity to engage with a wide range of stakeholders to explore the topic of creating a culture of challenge within audit firms and restoring confidence in the profession.
This publication further explores the themes discussed at the conference, with contributions from academics, audit firms, administrators, regulators, culture change experts, and others within the audit ecosystem.
This collection is divided into five chapters/areas:
1 Building an audit firm culture that supports high-quality auditing
2 The role of the audit committee
3 Developing a mindset of professional skepticism and challenge
4 Embedding and measuring organizational culture
5 Audit firm culture, audit quality, and the role of the regulator
Pages 34 - 36 (Chapter 3) features an article by FAR Board members Olof Bik and Jan Bouwens on "Audit firm incentives and audit firm culture: the role of the auditee".
FAR Brown Bag Seminar 11 March 2022
On Friday, March 11, from 3:30 -16:30 p.m., FAR will organize another Brown Bag seminar for Young Academics and Young Profs. This time Linde Kerckhofs (Vrije Universiteit Brussel) will present the paper 'The Role of Partner Narcissism in a Private Market Setting: Consequences for Audit Reporting Decisions and Audit Pricing'.
The presentation will be followed by a discussion by Oliver Hegers (Universiteit van Amsterdam). Afterwards the participants can ask questions.
Are you part of the target group and would you like to participate? Please send an email to info@foundationforauditingresearch.org
Upcoming events – save the dates!
FAR Young Auditing Academic Brown Bag Seminar
On Friday, March 11 2022, from 3:30 - 4:30 p.m. CET, FAR is hosting its next Brown Bag Seminar for Young Academics and Young Profs. Linde Kerckhofs (VUB, Vrije Universiteit Brussel) will present a paper then. More info about the seminar can be read in this newsletter.
Are you part of the target group and would you like to attend as well? Please send an email to info@foundationforauditingresearch.org
FAR International Conference 2022
We would like to let you know that we have set the date for our annual International Conference for 2022 on Monday, June 20 and Tuesday, June 21. At the moment we are busy drafting the program, but please add these dates to your calendar for next year!
Online FAR Masterclass by Prof. Jean Bédard
This Masterclass has been postponed for the time being. As soon as we have a new date, we will let you know through our various channels.
Do you have suggestions on how to improve our newsletter or news you would like to share with us? Please let us know by sending an email to info@foundationforauditingresearch.org
Back to overview