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FAR Practice Note - Virtual audit teamwork: Working, learning, and delivering high audit quality virtually
Iver Wiertz PhD student Prof. dr. Wim Gijselaers Dr. Therese Grohnert Prof. dr. Roger Meuwissen RA Prof. dr. Ann Vanstraelen
Practice Notes - Practitioner's Notes
20-09-2023
Details
 

Authors

Iver Wiertz PhD student
Prof. dr. Wim Gijselaers

Wim Gijselaers is full professor in educational research, in the School of Business and Economics at Maastricht University, the Netherlands. His research focuses on educational innovation in higher education, social determinants of team cognition and team performance, and judgment and decision making in management and accounting. His educational development work focused on the further development of Problem-Based Learning within Business Education. Next to teaching in the award-winning Master program Management of Learning, he teaches as visiting professor at the University of Bern (Switzerland) in a post-graduate program for Health Care Professionals. Wim is member of advisory boards of universities in Germany and Switzerland, and serves as chief-editor of the Springer Book Series Innovation and Change in Professional Education. Next, he is affiliated with the consulting firm Learning Miles (based in Helsinki). In this role he has presented workshops for Scandinavian-based companies on topics of Innovation and Change. He was co-founder and chair of the EDINEB network in the Nineties. Next, he was the founding editor of the Springer Book Series Educational Innovation in Economics and Business. He served positions as Program Director of International Business, and Associated Dean of Education. Currently he is chair of the department of Educational Research and Development, at the School of Business and Economics (Maastricht University). Several of his PhD’s received awards for their PhD Thesis, or papers presented at meetings of the American Educational Research Association, the Association for the Advancement of Computing in Education, and the EARLI Special Interest Group 14 “Learning and Professional Development”. Together with Professor Ann Vanstraelen he coordinates the GSBE research project "Culture, Ethics, and Leadership": https://www.maastrichtuniversity.nl/research/institutes/gsbe/gsbe-research.

Dr. Therese Grohnert
Prof. dr. Roger Meuwissen RA
Prof. dr. Ann Vanstraelen

Ann Vanstraelen is Full Professor of Accounting and Assurance Services at Maastricht University and serves as Head of the department of Accounting and Information Management. She coordinates the multidisciplinary research theme "Culture, Ethics and Leadership". She earned her PhD at the University of Antwerp. Her research interests relate to the broad field of auditing and assurance services, governance, corporate reporting and disclosure, with a specific focus on the quality of accounting and auditing practices. 

 


FAR Working Paper 2023/09 - 20: Empirical Evidence on Gender Effect and Workload Allocation in Audit Firms
Prof. dr. Eddy Cardinaels Ass. Prof. Simon Dekeyser Cara Zhang PhD student
Working Papers
15-09-2023
Details
 

In this paper, we investigate gender differences in the workload allocation process. Using a sample of 3,747 partner-year observations and 107,192 firm-year observations from Belgium, we find that female partners are associated with lower levels of workload in terms of the number of clients they serve. Our results also show that female partners audit fewer new clients. We find that the gender effect on workload is particularly strong for partners in the earlier stages of their careers. For experienced partners, we do not find gender differences in their workload, suggesting that differences between males and females in terms of workload eventually disappear. Further, we find that female auditors have clients with higher audit quality, but when controlling for workload this effect becomes smaller and even disappears in the full and Non-Big 4 sample. Our results suggest that differences in the workload allocation process can be a contributing factor to different levels of audit quality that female partners provide compared to their male counterparts. That is male auditors audit significantly more clients, which may constitute a risk factor for the audit quality they provide.

Authors

Prof. dr. Eddy Cardinaels

Eddy Cardinaels (1975) is full Professor of accounting at Tilburg University and part-time professor at KU Leuven. His work combines new insights from psychology and behavioral economics to study how different information presentation (ABC, BSC, summaries of earnings releases) can affect decision making of managers within companies. Other experimental work focuses on drivers of honest reporting and social motives in inter-firm negotiations. He also conducts archival work on corporate governance examining how social connections between board members affect financial reporting, how companies use their networks to engage in tax avoidance and factors that drive (excess) compensation. 

Ass. Prof. Simon Dekeyser
Cara Zhang PhD student
FAR Practice Note - Auditors’ Going Concern Decisions: Insights from Practice
Dr. Dominic Detzen Prof. dr. Marshall Geiger Prof. dr. Anna Gold Prof. dr. Philip Wallage
Practice Notes - Practitioner's Notes
05-09-2023
Details
 

This practice note provides initial insights from an interview study that investigates audit professionals’ decision-making processes regarding their clients’ ability to continue as a going concern. We find that these decisions involve the activation of a range of different actors that the engagement leader needs to manage and coordinate. Specifically, auditors need to recognize going concern as a relevant issue (Phase 1). They then need to negotiate the involvement of their firm’s national office and restructuring specialists (Phase 2). As they conduct the going concern assessment, they mobilize a range of internal and external actors to negotiate management disclosures and the inclusion (or not) of a going concern paragraph in their audit opinion (Phase 3).

Authors

Dr. Dominic Detzen

I am an associate professor of accounting, having joined the VU in 2013. After successfully completing the tenure-track, I was promoted to my current position in 2018. I earned my PhD in 2013 from HHL Leipzig Graduate School of Management in Leipzig, Germany.

Prof. dr. Marshall Geiger

Marshall A. Geiger, Ph.D., CPA, is the CSX Chair in Management and Accounting and Professor of Accounting at the Robins School of Business, University of Richmond. Marshall has also been an honorary Professor of the Faculty of Business and Law at Deakin University in Australia.  He graduated from Penn State University in 1988 with his Ph.D. in accounting and has published over 75 articles, a research monograph, and a Chapter in a research reference book on numerous topics in accounting, auditing and accounting education. Marshall has been recognized as the most prolific accounting scholar among all accounting Ph.Ds graduating worldwide in 1988. He is a past Editor at Auditing: A Journal of Practice & Theory, and former Associate Editor at Accounting Horizons and holds appointments on five editorial review boards of scholarly journals in the US and internationally. Marshall has delivered over 60 educational and research seminars and programs on a broad range of topics in accounting and auditing to a wide range of participants, including audit practitioners, entrepreneurs, academics, lawyers and standard-setters.


Prof. dr. Anna Gold

Anna Gold is Professor of Auditing at Vrije Universiteit Amsterdam and Adjunct Professor at Norwegian School of Economics (NHH). She earned her PhD at the University of Amsterdam. Her research interests are in the judgment and decision-making area, primarily applied to the field of auditing. Her research has focused on the impact of regulatory changes (e.g., fraud consultation, audit firm rotation, and auditor reporting standard changes) on judgments and decisions of auditors, preparers, and financial statement users. She has also examined how auditors and audit firms manage errors and whether varying the error management climate affects auditors’ error reporting willingness and learning. Her current work focuses on how auditors use specialist advice, the communication between auditors and audit committees, and auditors’ use of audit technology. 

She has published her research in outlets such as The Accounting ReviewContemporary Accounting ResearchAuditing: A Journal of Practice & TheoryAccounting Horizons, Journal of Business Ethics, and International Journal of AuditingProfessor Gold currently serves as editor at The Accounting Review (2020-2023) and Maandblad voor Accountancy en Bedrijfseconomie (since 2018). She is a member of the editorial board of Auditing: A Journal of Practice and Theory.

Prof. dr. Philip Wallage

Professor of Auditing at VU University Amsterdam and University of Amsterdam

FAR Practice Note - Partner-Manager Voice Modeling Behavior, and the Effects of Mixed Messages on Audit Teams
Prof. dr. Jere R. Francis Prof. dr. Murray R. Barrick Prof. dr. Olof Bik RA Lena Pieper PhD student Prof. dr. Ann Vanstraelen
Practice Notes - Practitioner's Notes
05-09-2023
Details
 

Team science research in the organizational behavior (OB) literature shows that successful teams must elicit “voice” from its members, i.e., the willingness to speak up and share information with the team. We propose a framework that recognizes when leaders exhibit their own “voice” behaviors, it creates psychological safety for the team – i.e., it allows team members to feel safe and encouraged to speak up about important audit matters. Analysis of data from 127 audit engagement teams with 754 auditors indicates the following. First, there is a positive and dominant effect on an audit team’s psychological safety (and ultimately on team voice climate and team performance) when managers engage in voice role modeling behavior. However, when the manager is also seen to engage in negative counterproductive behaviors, such as taking “short cuts” during the audit, the positive effects of his / her voice modeling behaviors are lost. This finding shows the importance of avoiding “mixed messages” from the manager, as this leads audit team members to question whether it is safe to speak up. Second, our findings reveal that when the partner and manger differ in emphasizing voice behaviors (one high, one low), these mixed (inconsistent) messages did not diminish perceived team psychological safety. Thus, if at least one leader (either the partner or the manager) is enacting high levels of voice role modeling behavior, the team still has high psychological safety and team voice climate. The results emphasize the need for leadership training to help partners and managers demonstrate, through their own “voice” leadership behaviors, that there is an environment of psychological safety that enables voice for the audit team. However inconsistent signals from team leaders can potentially compromise the team’s sense of psychological safety. 

Authors

Prof. dr. Jere R. Francis

Professor Jere Francis is ranked among the top ten academics to publish in leading scientific journals in the field of accountancy research. He won two awards from the American Accounting Association (AAA) for his substantial contribution to auditing research. He was also named Outstanding Audit Educator in 2013 by the AAA. Professor Francis served on the editorial boards of several leading scientific journals, including Abacus, Accounting Organizations & Society, Accounting & Finance, Auditing: A Journal of Practice & Theory, Contemporary Accounting Research, Journal of Accounting & Economics, Review of Accounting Studies, and The Accounting Review. In addition to being of scientific import, his research has been of practical significance to accountants and regulatory authorities and he has presented his research to leading international accountancy firms, the American Institute of Certified Public Accountants, the World Bank and the Public Company Accounting Oversight Board in the United States. As FAR Research Chair, Professor Francis conducts scientific research on the quality of audits. He will also boost auditing education in the Netherlands with the help of several PhD students as part of this chair position.

Prof. dr. Murray R. Barrick

Professor Barrick’s research focuses on the impact individual differences in behavior and personality have on job performance and on methods of measuring and predicting such differences.  He also is a co-author of the Theory of Purposeful Work Behavior, which highlights the role of purposefulness and experienced meaningfulness arising within the person as a key to explaining person-situation interactions.  Further, Barrick studies executive team success, examining the role of the CEO, personality and leadership of TMT members, team composition, team interdependence, and team processes on individual, team, and firm performance.  Finally, he also has examined the influence candidate self-presentation tactics have on the interviewer during an employment interview.

Prof. dr. Olof Bik RA

Olof Bik is professor Behavioral Research in Auditing at Nyenrode Business University. He is also a member of the daily board of the Foundation for Auditing Research (FAR). Bik worked in accounting practice for 18 years, since 2002 always in combination with a university appointment. He obtained his PhD at the University of Groningen with a dissertation on the effects of culture on accountant behavior.

Lena Pieper PhD student

Lena Pieper is a PhD candidate at the Accounting and Information Management Department of Maastricht University, supervised by Prof. Ann Vanstraelen and Prof. Jere Francis. She obtained her MSc in International Business, specializing in Accounting, from Maastricht University (cum laude). Her broad research interests lie in the area of Audit research. She is interested in drivers of audit quality, specifically in understanding how different audit teams and their leaders function and how that impacts audit outcomes. 

She is also a member of the multidiscipliniary research theme Culture, Ethics and Leadership and serves as the PhD Representative in the GSBE board.

Together with Prof. Ann Vanstraelen, she co-coordinates and teaches an undergraduate Auditing course. 

Prof. dr. Ann Vanstraelen

Ann Vanstraelen is Full Professor of Accounting and Assurance Services at Maastricht University and serves as Head of the department of Accounting and Information Management. She coordinates the multidisciplinary research theme "Culture, Ethics and Leadership". She earned her PhD at the University of Antwerp. Her research interests relate to the broad field of auditing and assurance services, governance, corporate reporting and disclosure, with a specific focus on the quality of accounting and auditing practices. 

 


FAR Working Paper 2023/08 - 19: Internal Control Deficiencies and Audit Staffing
Prof. dr. Christian Hofmann Sebastian Kuhn PhD student Dr. Jeroen van Raak Dr. Nina Schwaiger
Working Papers
30-08-2023
Details
 

We analyze how engagement lead partners staff audits with types of internal control deficiencies (ICD). Previous literature suggests that audit teams react to the discovery of ICDs by increasing effort in order to keep audit quality constant. However, audit effort is a multifaceted construct due to the heterogeneity of auditor characteristics within an audit team. We argue that the hours worked by expert personnel, such as high-ranking auditors and specialists, represent a scarce resource for the audit firm. In the internal control setting, engagement lead partners are likely to use this resource when audit teams encounter wide-scope ICDs, such as entity wide and ITrelated ICDs. Using proprietary data on the audit processes of Big 4 audit firms in the Netherlands, we find evidence in line with this argument. When wide-scope ICDs are encountered during the audit, more audit hours are worked by expert auditors. In contrast, only non-expert auditors work more audit hours in engagements with narrow-scope ICDs, such as account level ICDs. In additional analyses, we find that the combination of expert audit effort and ICD scope is associated with audit outcomes and audit quality. Overall, we provide novel evidence on audit staffing in the presence of internal control deficiencies.

Authors

Prof. dr. Christian Hofmann
Sebastian Kuhn PhD student
Dr. Jeroen van Raak
Dr. Nina Schwaiger
FAR Working Paper 2023/08 - 18: The Role of Hierarchical Team Leader’s Voice Modeling Behavior, Moderated by Mixed Behavioral Messages on Team Psychological Safety, Voice Climate, and Effectiveness
Prof. dr. Murray R. Barrick Prof. dr. Olof Bik RA Prof. dr. Jere R. Francis Lena Pieper PhD student Prof. dr. Ann Vanstraelen
Working Papers
23-08-2023
Details
 

Successful teams must elicit voice from its members, and although it is clear team leaders play a vital role, why leaders matter is not. Drawing from modeling theory and the dual, hierarchical team structure of many action teams we propose that when the two leaders (i.e., the direct manager and the skip-level leader) model specific functional voice behaviors, team members feel safe and speak up, which enhances team performance. We also hypothesize how “mixed behavioral messages” (from one or both leaders) create boundary conditions around this relationship. Analysis of survey and proprietary archival data from 127 professional service (i.e., audit) teams and up to 754 auditors revealed a positive and dominant association with team psychological safety when managers (but not partners) engaged in voice modeling behavior, controlled for the leader’s transformational leadership style. As expected, this effect is even stronger the more involved the managers are with their teams. Yet, when the manager’s positive voice behaviors are combined with negative counterproductive behaviors, such as taking “short cuts” during the audit, the positive relations on team psychological safety fade. In contrast to the conventional logic that more voice modeling by multiple leaders is better, our findings also reveal that this positive effect was attenuated when the skip-level leader’s use of voice modeling behavior is higher too – confirming our hypothesis of the stifling effect of the higher-level partner’s attempt to influence member voice. These findings underline the importance of avoiding mixed behavioral messages from the manager and between the manager and the skiplevel leader, as this otherwise leads followers to question whether it is safe to speak up voluntarily. We discuss theoretical and practical implications from encouraging leader voice modeling behaviors to elicit team member voice and higher performance in action teams, and the detrimental effect of leaders’ mixed behavioral messaging.

Authors

Prof. dr. Murray R. Barrick

Professor Barrick’s research focuses on the impact individual differences in behavior and personality have on job performance and on methods of measuring and predicting such differences.  He also is a co-author of the Theory of Purposeful Work Behavior, which highlights the role of purposefulness and experienced meaningfulness arising within the person as a key to explaining person-situation interactions.  Further, Barrick studies executive team success, examining the role of the CEO, personality and leadership of TMT members, team composition, team interdependence, and team processes on individual, team, and firm performance.  Finally, he also has examined the influence candidate self-presentation tactics have on the interviewer during an employment interview.

Prof. dr. Olof Bik RA

Olof Bik is professor Behavioral Research in Auditing at Nyenrode Business University. He is also a member of the daily board of the Foundation for Auditing Research (FAR). Bik worked in accounting practice for 18 years, since 2002 always in combination with a university appointment. He obtained his PhD at the University of Groningen with a dissertation on the effects of culture on accountant behavior.

Prof. dr. Jere R. Francis

Professor Jere Francis is ranked among the top ten academics to publish in leading scientific journals in the field of accountancy research. He won two awards from the American Accounting Association (AAA) for his substantial contribution to auditing research. He was also named Outstanding Audit Educator in 2013 by the AAA. Professor Francis served on the editorial boards of several leading scientific journals, including Abacus, Accounting Organizations & Society, Accounting & Finance, Auditing: A Journal of Practice & Theory, Contemporary Accounting Research, Journal of Accounting & Economics, Review of Accounting Studies, and The Accounting Review. In addition to being of scientific import, his research has been of practical significance to accountants and regulatory authorities and he has presented his research to leading international accountancy firms, the American Institute of Certified Public Accountants, the World Bank and the Public Company Accounting Oversight Board in the United States. As FAR Research Chair, Professor Francis conducts scientific research on the quality of audits. He will also boost auditing education in the Netherlands with the help of several PhD students as part of this chair position.

Lena Pieper PhD student

Lena Pieper is a PhD candidate at the Accounting and Information Management Department of Maastricht University, supervised by Prof. Ann Vanstraelen and Prof. Jere Francis. She obtained her MSc in International Business, specializing in Accounting, from Maastricht University (cum laude). Her broad research interests lie in the area of Audit research. She is interested in drivers of audit quality, specifically in understanding how different audit teams and their leaders function and how that impacts audit outcomes. 

She is also a member of the multidiscipliniary research theme Culture, Ethics and Leadership and serves as the PhD Representative in the GSBE board.

Together with Prof. Ann Vanstraelen, she co-coordinates and teaches an undergraduate Auditing course. 

Prof. dr. Ann Vanstraelen

Ann Vanstraelen is Full Professor of Accounting and Assurance Services at Maastricht University and serves as Head of the department of Accounting and Information Management. She coordinates the multidisciplinary research theme "Culture, Ethics and Leadership". She earned her PhD at the University of Antwerp. Her research interests relate to the broad field of auditing and assurance services, governance, corporate reporting and disclosure, with a specific focus on the quality of accounting and auditing practices. 

 


Practitioner Perspectives on Going Concern Opinion Research and Suggestions for Further Study
Prof. dr. Marshall Geiger Prof. dr. Anna Gold Prof. dr. Philip Wallage
Practice Notes - Practitioner's Notes
22-08-2023
Details
 

A two-part article forthcoming in Accounting Horizons (2024)

Authors

Prof. dr. Marshall Geiger

Marshall A. Geiger, Ph.D., CPA, is the CSX Chair in Management and Accounting and Professor of Accounting at the Robins School of Business, University of Richmond. Marshall has also been an honorary Professor of the Faculty of Business and Law at Deakin University in Australia.  He graduated from Penn State University in 1988 with his Ph.D. in accounting and has published over 75 articles, a research monograph, and a Chapter in a research reference book on numerous topics in accounting, auditing and accounting education. Marshall has been recognized as the most prolific accounting scholar among all accounting Ph.Ds graduating worldwide in 1988. He is a past Editor at Auditing: A Journal of Practice & Theory, and former Associate Editor at Accounting Horizons and holds appointments on five editorial review boards of scholarly journals in the US and internationally. Marshall has delivered over 60 educational and research seminars and programs on a broad range of topics in accounting and auditing to a wide range of participants, including audit practitioners, entrepreneurs, academics, lawyers and standard-setters.


Prof. dr. Anna Gold

Anna Gold is Professor of Auditing at Vrije Universiteit Amsterdam and Adjunct Professor at Norwegian School of Economics (NHH). She earned her PhD at the University of Amsterdam. Her research interests are in the judgment and decision-making area, primarily applied to the field of auditing. Her research has focused on the impact of regulatory changes (e.g., fraud consultation, audit firm rotation, and auditor reporting standard changes) on judgments and decisions of auditors, preparers, and financial statement users. She has also examined how auditors and audit firms manage errors and whether varying the error management climate affects auditors’ error reporting willingness and learning. Her current work focuses on how auditors use specialist advice, the communication between auditors and audit committees, and auditors’ use of audit technology. 

She has published her research in outlets such as The Accounting ReviewContemporary Accounting ResearchAuditing: A Journal of Practice & TheoryAccounting Horizons, Journal of Business Ethics, and International Journal of AuditingProfessor Gold currently serves as editor at The Accounting Review (2020-2023) and Maandblad voor Accountancy en Bedrijfseconomie (since 2018). She is a member of the editorial board of Auditing: A Journal of Practice and Theory.

Prof. dr. Philip Wallage

Professor of Auditing at VU University Amsterdam and University of Amsterdam

FAR Working Paper 2023/08 - 17: What Exactly Do We Mean by Audit Quality?
Prof. dr. Jere R. Francis
Working Papers
18-08-2023
Details
 

The concept of audit quality is of fundamental importance in auditing, but there is little agreement on its definition or measurement. I review several approaches to understanding audit quality and argue that the most meaningful measure is based on what the auditor is legally required to do, which is to opine on the client’s financial statements. This has resulted in a black and white (pass/fail) binary model of the audit report. However, we know there is a continuum of quality in the audited financial statements of clients, and that much of this variation is the result of the client’s accounting policy choices and estimations. Yet most firms receive a standard clean opinion despite the wide variation in financial statement quality. I argue that while it is important for auditors to follow procedural rules (standards) to gather sufficient evidence, it is equally important that auditors carefully monitor and constrain, where necessary, a client’s aggressive accounting policy choices and estimates. The logical consequence is that the quality of audited financial statements and the quality of the audit report are related, and both are continuums, fifty shades of grey. Thus, audit report quality is better understood as a spectrum rather than a binary pass/fail model. Going forward, the challenge is to find ways for an auditor to convey information about the quality of audited earnings that go beyond the binary model of the current audit report.

Authors

Prof. dr. Jere R. Francis

Professor Jere Francis is ranked among the top ten academics to publish in leading scientific journals in the field of accountancy research. He won two awards from the American Accounting Association (AAA) for his substantial contribution to auditing research. He was also named Outstanding Audit Educator in 2013 by the AAA. Professor Francis served on the editorial boards of several leading scientific journals, including Abacus, Accounting Organizations & Society, Accounting & Finance, Auditing: A Journal of Practice & Theory, Contemporary Accounting Research, Journal of Accounting & Economics, Review of Accounting Studies, and The Accounting Review. In addition to being of scientific import, his research has been of practical significance to accountants and regulatory authorities and he has presented his research to leading international accountancy firms, the American Institute of Certified Public Accountants, the World Bank and the Public Company Accounting Oversight Board in the United States. As FAR Research Chair, Professor Francis conducts scientific research on the quality of audits. He will also boost auditing education in the Netherlands with the help of several PhD students as part of this chair position.

FAR Working Paper 2023/08 - 16: Audit Partner-Manager Dyadic Fit and Audit Team Functioning
Lena Pieper PhD student Prof. dr. Murray R. Barrick Prof. dr. Olof Bik RA Prof. dr. Jere R. Francis Prof. dr. Ann Vanstraelen
Working Papers
17-08-2023
Details
 

This paper investigates the formation of audit partner-manager pairings (dyads) and the consequences of this formation on the functioning of the engagement team. Prior literature mainly focuses on the role of one leader alone, while in practice, an audit team is usually led by two key figures. This dual-leadership structure and its potential effect on the team are largely unexplored. We draw on the theory of homophily to develop predictions, and test them using data from 221 engagement teams and their leaders. The analyses suggest that partners and managers that form a dyad are more similar in terms of their skills and leadership behavior than other random matches based on the available pool of auditors. However, the similarity is not necessarily beneficial for the functioning of the engagement team. Only when the partner and manager are both highly skilled and demonstrate strong leadership does the similarity result in a better functioning team. Otherwise, a complementary match is associated with better team dynamics. The findings on the role of partner-manager dyads in guiding an engagement team can inform audit firms on how to better compose and manage their audit teams.

Authors

Lena Pieper PhD student

Lena Pieper is a PhD candidate at the Accounting and Information Management Department of Maastricht University, supervised by Prof. Ann Vanstraelen and Prof. Jere Francis. She obtained her MSc in International Business, specializing in Accounting, from Maastricht University (cum laude). Her broad research interests lie in the area of Audit research. She is interested in drivers of audit quality, specifically in understanding how different audit teams and their leaders function and how that impacts audit outcomes. 

She is also a member of the multidiscipliniary research theme Culture, Ethics and Leadership and serves as the PhD Representative in the GSBE board.

Together with Prof. Ann Vanstraelen, she co-coordinates and teaches an undergraduate Auditing course. 

Prof. dr. Murray R. Barrick

Professor Barrick’s research focuses on the impact individual differences in behavior and personality have on job performance and on methods of measuring and predicting such differences.  He also is a co-author of the Theory of Purposeful Work Behavior, which highlights the role of purposefulness and experienced meaningfulness arising within the person as a key to explaining person-situation interactions.  Further, Barrick studies executive team success, examining the role of the CEO, personality and leadership of TMT members, team composition, team interdependence, and team processes on individual, team, and firm performance.  Finally, he also has examined the influence candidate self-presentation tactics have on the interviewer during an employment interview.

Prof. dr. Olof Bik RA

Olof Bik is professor Behavioral Research in Auditing at Nyenrode Business University. He is also a member of the daily board of the Foundation for Auditing Research (FAR). Bik worked in accounting practice for 18 years, since 2002 always in combination with a university appointment. He obtained his PhD at the University of Groningen with a dissertation on the effects of culture on accountant behavior.

Prof. dr. Jere R. Francis

Professor Jere Francis is ranked among the top ten academics to publish in leading scientific journals in the field of accountancy research. He won two awards from the American Accounting Association (AAA) for his substantial contribution to auditing research. He was also named Outstanding Audit Educator in 2013 by the AAA. Professor Francis served on the editorial boards of several leading scientific journals, including Abacus, Accounting Organizations & Society, Accounting & Finance, Auditing: A Journal of Practice & Theory, Contemporary Accounting Research, Journal of Accounting & Economics, Review of Accounting Studies, and The Accounting Review. In addition to being of scientific import, his research has been of practical significance to accountants and regulatory authorities and he has presented his research to leading international accountancy firms, the American Institute of Certified Public Accountants, the World Bank and the Public Company Accounting Oversight Board in the United States. As FAR Research Chair, Professor Francis conducts scientific research on the quality of audits. He will also boost auditing education in the Netherlands with the help of several PhD students as part of this chair position.

Prof. dr. Ann Vanstraelen

Ann Vanstraelen is Full Professor of Accounting and Assurance Services at Maastricht University and serves as Head of the department of Accounting and Information Management. She coordinates the multidisciplinary research theme "Culture, Ethics and Leadership". She earned her PhD at the University of Antwerp. Her research interests relate to the broad field of auditing and assurance services, governance, corporate reporting and disclosure, with a specific focus on the quality of accounting and auditing practices. 

 


FAR Working Paper 2023/08 - 15: Does Personality Relate to Job Performance of Audit Partners and Managers?
Lena Pieper PhD student Prof. dr. Murray R. Barrick Prof. dr. Olof Bik RA Prof. dr. Jere R. Francis Prof. dr. Ann Vanstraelen
Working Papers
16-08-2023
Details
 

We investigate if personality traits are associated with the skills and job performance of experienced auditors. Based on survey and internal audit firm data from 1,600 Dutch auditors from the Big 4 and six mid-sized audit firms, we first provide descriptive evidence of significant variation in auditors' personality traits. Personality traits vary between Big 4 and non-Big 4 auditors, and auditors become increasingly homogenous in higher function levels. Next, we find that personality traits predict distinct skills (commercial, technical, and leadership) that are part of the auditor’s job. The tension that exists between the commercial and technical aspects of the audit is also reflected in opposing personality profiles that are beneficial for each of the skills. Finally, audit firm assessments of job performance are associated with personality, both directly, and indirectly through their effect on skills. Collectively, these results contribute to our limited understanding of personal characteristics and auditor performance. 

Authors

Lena Pieper PhD student

Lena Pieper is a PhD candidate at the Accounting and Information Management Department of Maastricht University, supervised by Prof. Ann Vanstraelen and Prof. Jere Francis. She obtained her MSc in International Business, specializing in Accounting, from Maastricht University (cum laude). Her broad research interests lie in the area of Audit research. She is interested in drivers of audit quality, specifically in understanding how different audit teams and their leaders function and how that impacts audit outcomes. 

She is also a member of the multidiscipliniary research theme Culture, Ethics and Leadership and serves as the PhD Representative in the GSBE board.

Together with Prof. Ann Vanstraelen, she co-coordinates and teaches an undergraduate Auditing course. 

Prof. dr. Murray R. Barrick

Professor Barrick’s research focuses on the impact individual differences in behavior and personality have on job performance and on methods of measuring and predicting such differences.  He also is a co-author of the Theory of Purposeful Work Behavior, which highlights the role of purposefulness and experienced meaningfulness arising within the person as a key to explaining person-situation interactions.  Further, Barrick studies executive team success, examining the role of the CEO, personality and leadership of TMT members, team composition, team interdependence, and team processes on individual, team, and firm performance.  Finally, he also has examined the influence candidate self-presentation tactics have on the interviewer during an employment interview.

Prof. dr. Olof Bik RA

Olof Bik is professor Behavioral Research in Auditing at Nyenrode Business University. He is also a member of the daily board of the Foundation for Auditing Research (FAR). Bik worked in accounting practice for 18 years, since 2002 always in combination with a university appointment. He obtained his PhD at the University of Groningen with a dissertation on the effects of culture on accountant behavior.

Prof. dr. Jere R. Francis

Professor Jere Francis is ranked among the top ten academics to publish in leading scientific journals in the field of accountancy research. He won two awards from the American Accounting Association (AAA) for his substantial contribution to auditing research. He was also named Outstanding Audit Educator in 2013 by the AAA. Professor Francis served on the editorial boards of several leading scientific journals, including Abacus, Accounting Organizations & Society, Accounting & Finance, Auditing: A Journal of Practice & Theory, Contemporary Accounting Research, Journal of Accounting & Economics, Review of Accounting Studies, and The Accounting Review. In addition to being of scientific import, his research has been of practical significance to accountants and regulatory authorities and he has presented his research to leading international accountancy firms, the American Institute of Certified Public Accountants, the World Bank and the Public Company Accounting Oversight Board in the United States. As FAR Research Chair, Professor Francis conducts scientific research on the quality of audits. He will also boost auditing education in the Netherlands with the help of several PhD students as part of this chair position.

Prof. dr. Ann Vanstraelen

Ann Vanstraelen is Full Professor of Accounting and Assurance Services at Maastricht University and serves as Head of the department of Accounting and Information Management. She coordinates the multidisciplinary research theme "Culture, Ethics and Leadership". She earned her PhD at the University of Antwerp. Her research interests relate to the broad field of auditing and assurance services, governance, corporate reporting and disclosure, with a specific focus on the quality of accounting and auditing practices. 

 


FAR Practice Note - Leadership Behaviors by Partners and Managers, and Audit Team Performance
Prof. dr. Jere R. Francis Prof. dr. Murray R. Barrick Prof. dr. Olof Bik RA Prof. Bradley Kirkman Lena Pieper PhD student Prof. dr. Ann Vanstraelen
Practice Notes - Practitioner's Notes
15-08-2023
Details
 

Leadership research in the organizational behavior (OB) literature has generally focused on singleleader teams. Yet many organization, including audit firms, have more complex dual leader structures in which leadership duties are shared between two team leaders. We study this in the context of audit teams in which the dual leaders are the audit partner and the audit manager. We find some evidence that division of labor in leadership behaviors is effective. However, the most effective audit teams are those in which both the partner and manager have what are called “consideration” behaviors that exhibit a concern for the welfare of team members. We call this “the power of consideration.” This finding makes sense given that audit teams come together for short periods of time, and there is a need for the audit team to feel confident in order to be effective. The other condition in which audit teams perform well is when the partner exhibits strong leadership behaviors for both initiating structure (defining goals, communication channels, time-lines) and consideration, irrespective of the manager’s leadership behaviors. We call this the “super partner” effect. Overall, the results point to active engagement by partners and managers with the audit team as being the most effective leadership behaviors. While initiating structure behaviors are important, consideration behaviors are far more important in audit teams, a finding which differs from prior OB research. Finally, the results underscore the importance of training partners and managers in the effective use of consideration behaviors to build team confidence and to ensure the best audit team performance.

Authors

Prof. dr. Jere R. Francis

Professor Jere Francis is ranked among the top ten academics to publish in leading scientific journals in the field of accountancy research. He won two awards from the American Accounting Association (AAA) for his substantial contribution to auditing research. He was also named Outstanding Audit Educator in 2013 by the AAA. Professor Francis served on the editorial boards of several leading scientific journals, including Abacus, Accounting Organizations & Society, Accounting & Finance, Auditing: A Journal of Practice & Theory, Contemporary Accounting Research, Journal of Accounting & Economics, Review of Accounting Studies, and The Accounting Review. In addition to being of scientific import, his research has been of practical significance to accountants and regulatory authorities and he has presented his research to leading international accountancy firms, the American Institute of Certified Public Accountants, the World Bank and the Public Company Accounting Oversight Board in the United States. As FAR Research Chair, Professor Francis conducts scientific research on the quality of audits. He will also boost auditing education in the Netherlands with the help of several PhD students as part of this chair position.

Prof. dr. Murray R. Barrick

Professor Barrick’s research focuses on the impact individual differences in behavior and personality have on job performance and on methods of measuring and predicting such differences.  He also is a co-author of the Theory of Purposeful Work Behavior, which highlights the role of purposefulness and experienced meaningfulness arising within the person as a key to explaining person-situation interactions.  Further, Barrick studies executive team success, examining the role of the CEO, personality and leadership of TMT members, team composition, team interdependence, and team processes on individual, team, and firm performance.  Finally, he also has examined the influence candidate self-presentation tactics have on the interviewer during an employment interview.

Prof. dr. Olof Bik RA

Olof Bik is professor Behavioral Research in Auditing at Nyenrode Business University. He is also a member of the daily board of the Foundation for Auditing Research (FAR). Bik worked in accounting practice for 18 years, since 2002 always in combination with a university appointment. He obtained his PhD at the University of Groningen with a dissertation on the effects of culture on accountant behavior.

Prof. Bradley Kirkman

Bradley L. Kirkman is the General (Ret.) H. Hugh Shelton Distinguished professor of leadership in the Department of Management, Innovation, and Entrepreneurship in the Poole College of Management at North Carolina State University. He received his Ph.D. in organizational behavior from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. His research focuses on leadership, international management, virtual teams, and work team leadership and empowerment. He was formerly the Foreman R. and Ruby Bennett Endowed Chair in Business Administration in the Mays Business School at Texas A&M University. He has also worked in the Scheller College of Management at The Georgia Institute of Technology and the Bryan School of Business and Economics at the University of North Carolina Greensboro. He has held visiting professor positions in the Department of Management and Organizations at the University of Western Australia in 2006 and the Guanghua School of Management at Peking University in 2012. He was the chief operating officer (from 2016 to 2021) and is currently the program chair of the Organizational Behavior Division in the Academy of Management.

Lena Pieper PhD student

Lena Pieper is a PhD candidate at the Accounting and Information Management Department of Maastricht University, supervised by Prof. Ann Vanstraelen and Prof. Jere Francis. She obtained her MSc in International Business, specializing in Accounting, from Maastricht University (cum laude). Her broad research interests lie in the area of Audit research. She is interested in drivers of audit quality, specifically in understanding how different audit teams and their leaders function and how that impacts audit outcomes. 

She is also a member of the multidiscipliniary research theme Culture, Ethics and Leadership and serves as the PhD Representative in the GSBE board.

Together with Prof. Ann Vanstraelen, she co-coordinates and teaches an undergraduate Auditing course. 

Prof. dr. Ann Vanstraelen

Ann Vanstraelen is Full Professor of Accounting and Assurance Services at Maastricht University and serves as Head of the department of Accounting and Information Management. She coordinates the multidisciplinary research theme "Culture, Ethics and Leadership". She earned her PhD at the University of Antwerp. Her research interests relate to the broad field of auditing and assurance services, governance, corporate reporting and disclosure, with a specific focus on the quality of accounting and auditing practices. 

 


FAR Practice Note - Audit Partner-Manager Dyadic Fit and Team Functioning
Prof. dr. Jere R. Francis Prof. dr. Murray R. Barrick Prof. dr. Olof Bik RA Lena Pieper PhD student Prof. dr. Ann Vanstraelen
Practice Notes - Practitioner's Notes Audit Culture
19-07-2023
Details
 

This study investigates the formation of audit partner-manager pairings (called dyads) on audit engagements, and the consequences of this dyad formation on the functioning of the engagement team. Prior studies mainly focus on the role of a single team leader, while in practice, an audit team is usually led by two senior individuals, the manager and the engagement partner. This dual-leadership structure and its potential effect on the team are largely unexplored topics. We draw on the theory of homophily to develop and test predictions using data from 221 Dutch engagement teams. The analyses suggest that partners and managers that form a dyad are more similar in terms of their skills and leadership behaviors than would be the case for randomly matched partners and managers. However, dyad similarity is not always beneficial for the functioning of the engagement team. In fact, dyad similarity generally has a negative effect on team climate and team performance. The exception is when the partner and manager are both highly skilled and demonstrate strong leadership behaviors. Otherwise, a complementary matching of skills and leadership behaviors of the partner and manager is superior and leads to better team climate and team performance. Team performance is self-assessed: how well the audit engagement team performed. Team climate is measured as the team’s assessment of psychological safety, team commitment, and team identity. Our findings on partner-manager dyads can inform audit firms on how to better assign and manage their audit teams, particularly since the audit partner chooses the manager most of the time (68 percent of the engagements in our study).

Authors

Prof. dr. Jere R. Francis

Professor Jere Francis is ranked among the top ten academics to publish in leading scientific journals in the field of accountancy research. He won two awards from the American Accounting Association (AAA) for his substantial contribution to auditing research. He was also named Outstanding Audit Educator in 2013 by the AAA. Professor Francis served on the editorial boards of several leading scientific journals, including Abacus, Accounting Organizations & Society, Accounting & Finance, Auditing: A Journal of Practice & Theory, Contemporary Accounting Research, Journal of Accounting & Economics, Review of Accounting Studies, and The Accounting Review. In addition to being of scientific import, his research has been of practical significance to accountants and regulatory authorities and he has presented his research to leading international accountancy firms, the American Institute of Certified Public Accountants, the World Bank and the Public Company Accounting Oversight Board in the United States. As FAR Research Chair, Professor Francis conducts scientific research on the quality of audits. He will also boost auditing education in the Netherlands with the help of several PhD students as part of this chair position.

Prof. dr. Murray R. Barrick

Professor Barrick’s research focuses on the impact individual differences in behavior and personality have on job performance and on methods of measuring and predicting such differences.  He also is a co-author of the Theory of Purposeful Work Behavior, which highlights the role of purposefulness and experienced meaningfulness arising within the person as a key to explaining person-situation interactions.  Further, Barrick studies executive team success, examining the role of the CEO, personality and leadership of TMT members, team composition, team interdependence, and team processes on individual, team, and firm performance.  Finally, he also has examined the influence candidate self-presentation tactics have on the interviewer during an employment interview.

Prof. dr. Olof Bik RA

Olof Bik is professor Behavioral Research in Auditing at Nyenrode Business University. He is also a member of the daily board of the Foundation for Auditing Research (FAR). Bik worked in accounting practice for 18 years, since 2002 always in combination with a university appointment. He obtained his PhD at the University of Groningen with a dissertation on the effects of culture on accountant behavior.

Lena Pieper PhD student

Lena Pieper is a PhD candidate at the Accounting and Information Management Department of Maastricht University, supervised by Prof. Ann Vanstraelen and Prof. Jere Francis. She obtained her MSc in International Business, specializing in Accounting, from Maastricht University (cum laude). Her broad research interests lie in the area of Audit research. She is interested in drivers of audit quality, specifically in understanding how different audit teams and their leaders function and how that impacts audit outcomes. 

She is also a member of the multidiscipliniary research theme Culture, Ethics and Leadership and serves as the PhD Representative in the GSBE board.

Together with Prof. Ann Vanstraelen, she co-coordinates and teaches an undergraduate Auditing course. 

Prof. dr. Ann Vanstraelen

Ann Vanstraelen is Full Professor of Accounting and Assurance Services at Maastricht University and serves as Head of the department of Accounting and Information Management. She coordinates the multidisciplinary research theme "Culture, Ethics and Leadership". She earned her PhD at the University of Antwerp. Her research interests relate to the broad field of auditing and assurance services, governance, corporate reporting and disclosure, with a specific focus on the quality of accounting and auditing practices.