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Practice Note: How is auditor commercialism related to audit quality? Prof. William Ciconte PhD Dr. Justin Leiby Prof. dr. Marleen Willekens Details
 

It is taken for granted that a fundamental conflict exists between auditors’ professional responsibilities and their commercial interests. While there is no direct evidence to support this widely held belief, it nonetheless fuels extensive, costly regulatory and standard-setting activities. We propose to examine whether auditors’ commercial and professional motivations actually conflict. Moreover, we argue that quality control mechanisms in audit firms—e.g., performance evaluation and technical consultation procedures—create conditions in which the two sets of motivations are likely mutually reinforcing.

Authors

Prof. William Ciconte PhD

Assistant Professor of Accountancy University of Illinois

Dr. Justin Leiby

Associate Professor of Accountancy and Professor Ken Perry Faculty Fellow University of Illinois

Prof. dr. Marleen Willekens

Full Professor of Accounting and Auditing at KU Leuven

Ten considerations for conducting Root Cause Analysis in auditing Prof. dr. Olof Bik Details
 

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 following ten considerations are discussed that are relevant for effectively and efficiently producing root cause findings and recommendations concerning the improvement of audit quality:

  • Root cause analysis, when done properly, can be a powerful tool for collective team-based learning, designed to avoid blame and strengthen continuous improvement.
  • Root cause analysis is about understanding human behavior and judgement and decision making: things that go wrong, often happen in the same way as things that go right.
  • There is not one single root cause to “fix” in the complex organizational context of auditing: incidents may happen that are reasonably beyond management control.
  • Root cause analysis findings and recommendations are not always interventions: it is up to management to weigh recommendations and decide on their “organizational fit”
  • Root cause analyses should be rigorous enough to allow for “evidence-based-change” only: formulating effective actions is more difficult than finding problems.
  • Strong recommendations rely less on a change in human behavior, but are practical, sensible, achievable, and actually measurable as far as what can be implemented.
  • Root cause analysis is a collaborative and dialogic process requiring time, human behavior expertise, and communication skills across professional and social boundaries.
  • Interviewing audit staff that depend on personal performance and professional accountability in their career development is a specifically daunting task.
  • Next to audit deficiencies as ‘triggering events”, good quality analyses and analyzing ‘near misses’ result in richer and stronger root cause analyses.
  • Next to engagement level root cause analysis, more holistic thematic and audit firm level analyses most likely deliver deeper insight and better results.

Authors

Prof. dr. Olof Bik

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.

Practice note: Is the internal value of the external audit greater for owner-managed businesses than for public interest entities? Dr. Mahmoud Gad Dr. Robin Litjens RA Prof. dr. Jeroen Suijs Details
 

The research study by Gad, Litjens en Suijs relates to the question of the Foundation for Auditing Research whether there exists a need for ‘different audits for different purposes’. Does the external audit of a public interest entity require a different approach than the external audit of an owner-managed business? In order to answer this question, it is appropriate to analyze the differences in value of the external audit for a public interest entity versus an owner-managed business.

Authors

Dr. Mahmoud Gad

Lecturer, Lancaster University 

Dr. Robin Litjens RA

Assistant Professor of Accounting at Tilburg University

Prof. dr. Jeroen Suijs

Professor of Financial Accounting at Erasmus University Rotterdam

Practice note: Is voor DGA-ondernemingen de interne waarde van de externe controle groter dan voor organisaties van openbaar belang? (Dutch) Prof. dr. Jeroen Suijs Dr. Mahmoud Gad Dr. Robin Litjens RA Details
 

Het onderzoek van Gad, Litjens en Suijs sluit aan op de vraag vanuit de Foundation for Auditing Research of er behoefte bestaat aan ‘different audits for different purposes’. Moet en kan de audit voor een organisatie van openbaar belang (OOB) anders worden aangepakt dan bijvoorbeeld voor een onderneming die door een DGA wordt geleid?

Authors

Prof. dr. Jeroen Suijs

Professor of Financial Accounting at Erasmus University Rotterdam

Dr. Mahmoud Gad

Lecturer, Lancaster University 

Dr. Robin Litjens RA

Assistant Professor of Accounting at Tilburg University

FAR Practice note: "What do we already know about…”: The Effects of Expert Status on the Audit of Complex Estimates Prof. dr. Anna Gold Prof. dr. Kathryn Kadous Dr. Justin Leiby Details
 

Authors

Prof. dr. Anna Gold

Anna Gold obtained her Ph.D. from the University of Amsterdam in 2004, worked as an assistant professor at Rotterdam School of Management, Erasmus University for six years and is currently professor at the Vrije Universiteit Amsterdam where she teaches Auditing at the BSc and MSc level, as well as PhD courses in Auditing and Experimental Methods. Anna’s 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, on judgments and decisions of auditors and financial statement users. Her recent work focuses on how auditors and audit firms handle errors and whether varying the error management climate affects auditors’ error reporting willingness and audit firm learning. Anna’s work and her publications have appeared in a number of prestigious journals such as The Accounting Review, Accounting Horizons, Journal of Business Ethics, and International Journal of Auditing.

Prof. dr. Kathryn Kadous

Kathryn Kadous is the Schaefer Chaired Professor of Accounting and the Director and Associate Dean of the Ph.D. Program at Emory University's Goizueta Business School. She earned a PhD from the University of Illinois. Prior to that, she worked as an auditor and controller. Professor Kadous' research considers judgment and decision-making issues in auditing and accounting. Her current research is focused primarily on using psychology theory to improve auditor decision making and on identifying the antecedents of auditor skepticism. Professor Kadous' research has been published in The Accounting Review, Contemporary Accounting Research, Journal of Accounting Research, Organizational Behavior and Human Decision Processes, The Journal of Behavioral Finance, and Auditing: A Journal of Practice and Theory. 

Professor Kadous has served two terms as an editor for The Accounting Review and two terms as an editor for Auditing: A Journal of Practice & Theory. She serves on several editorial boards and has served on various research and publications related committees and tasks forces for the American Accounting Association (AAA) and the Auditing and Accounting, Behavior, and Organizations Sections of the AAA. She is currently Vice-President (Academic) of the Auditing Section of the American Accounting Association.

Dr. Justin Leiby

Associate Professor of Accountancy and Professor Ken Perry Faculty Fellow University of Illinois

FAR Practice note: Het effect van de status van een ingeschakelde deskundige op de controle van complexe schattingen Prof. dr. Anna Gold Prof. dr. Kathryn Kadous Dr. Justin Leiby Details
 

Authors

Prof. dr. Anna Gold

Anna Gold obtained her Ph.D. from the University of Amsterdam in 2004, worked as an assistant professor at Rotterdam School of Management, Erasmus University for six years and is currently professor at the Vrije Universiteit Amsterdam where she teaches Auditing at the BSc and MSc level, as well as PhD courses in Auditing and Experimental Methods. Anna’s 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, on judgments and decisions of auditors and financial statement users. Her recent work focuses on how auditors and audit firms handle errors and whether varying the error management climate affects auditors’ error reporting willingness and audit firm learning. Anna’s work and her publications have appeared in a number of prestigious journals such as The Accounting Review, Accounting Horizons, Journal of Business Ethics, and International Journal of Auditing.

Prof. dr. Kathryn Kadous

Kathryn Kadous is the Schaefer Chaired Professor of Accounting and the Director and Associate Dean of the Ph.D. Program at Emory University's Goizueta Business School. She earned a PhD from the University of Illinois. Prior to that, she worked as an auditor and controller. Professor Kadous' research considers judgment and decision-making issues in auditing and accounting. Her current research is focused primarily on using psychology theory to improve auditor decision making and on identifying the antecedents of auditor skepticism. Professor Kadous' research has been published in The Accounting Review, Contemporary Accounting Research, Journal of Accounting Research, Organizational Behavior and Human Decision Processes, The Journal of Behavioral Finance, and Auditing: A Journal of Practice and Theory. 

Professor Kadous has served two terms as an editor for The Accounting Review and two terms as an editor for Auditing: A Journal of Practice & Theory. She serves on several editorial boards and has served on various research and publications related committees and tasks forces for the American Accounting Association (AAA) and the Auditing and Accounting, Behavior, and Organizations Sections of the AAA. She is currently Vice-President (Academic) of the Auditing Section of the American Accounting Association.

Dr. Justin Leiby

Associate Professor of Accountancy and Professor Ken Perry Faculty Fellow University of Illinois

FAR Practice note: Internal controls Prof. dr. Jean Bédard Dr. Annelies Renders Prof. dr. Mieke Jans Dr. Caren Schelleman Nadine Glaudemans MSc Dr. Mathijs van Peteghem Drs. Lei Zou Details
 

Authors

Prof. dr. Jean Bédard

Professor in Accounting, Laval University | ULAVAL · School of Accounting

Dr. Annelies Renders

Associate Professor Accounting & Information Management, School of Business and Economics

Prof. dr. Mieke Jans

Assistent Professor at Hasselt University

Dr. Caren Schelleman
Caren Schelleman is an assistant professor at the Department of Accounting and Information Management at Maastricht University School of Business and Economics. She has also been a visiting professor at the University of Auckland, New Zealand. Caren coordinates and teaches courses on internal control and auditing at both undergraduate and graduate levels. She has presented papers at Annual Congresses of the European Accounting Association, Midyear Meetings of the Audit Section of the American Accounting Association, the International Symposium on Audit Research, conferences of the European Auditing Research Network, and at several workshops and seminars in Europe and the US. Her research interests include auditing, assurance services, internal control, and corporate governance, both from an economic and a behavioral point of view.


Nadine Glaudemans MSc

Ph.D. Candidate Accounting & Information Management, School of Business and Economics, Maastricht University

Dr. Mathijs van Peteghem

Assistant Professor at Maastricht University & Doctoral researcher KU Leuven

Drs. Lei Zou

Ph.D. Candidate Acounting & Information Management, School of Business and Economics, Maastricht University

FAR Practice note: Interne beheersingssystemen Prof. dr. Jean Bédard Dr. Annelies Renders Prof. dr. Mieke Jans Dr. Caren Schelleman Nadine Glaudemans MSc Dr. Mathijs van Peteghem Drs. Lei Zou Details
 

Authors

Prof. dr. Jean Bédard

Professor in Accounting, Laval University | ULAVAL · School of Accounting

Dr. Annelies Renders

Associate Professor Accounting & Information Management, School of Business and Economics

Prof. dr. Mieke Jans

Assistent Professor at Hasselt University

Dr. Caren Schelleman
Caren Schelleman is an assistant professor at the Department of Accounting and Information Management at Maastricht University School of Business and Economics. She has also been a visiting professor at the University of Auckland, New Zealand. Caren coordinates and teaches courses on internal control and auditing at both undergraduate and graduate levels. She has presented papers at Annual Congresses of the European Accounting Association, Midyear Meetings of the Audit Section of the American Accounting Association, the International Symposium on Audit Research, conferences of the European Auditing Research Network, and at several workshops and seminars in Europe and the US. Her research interests include auditing, assurance services, internal control, and corporate governance, both from an economic and a behavioral point of view.


Nadine Glaudemans MSc

Ph.D. Candidate Accounting & Information Management, School of Business and Economics, Maastricht University

Dr. Mathijs van Peteghem

Assistant Professor at Maastricht University & Doctoral researcher KU Leuven

Drs. Lei Zou

Ph.D. Candidate Acounting & Information Management, School of Business and Economics, Maastricht University

The Salterio Papers – Hoe de wetenschap de beroepsontwikkeling van accountants effectief kan informeren Prof. dr. Olof Bik Prof. dr. Jan Bouwens Details
 

Authors

Prof. dr. Olof Bik

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. Jan Bouwens

Academic board member and managing director FAR

FAR’s response to the Green Paper Structure Models (9 April 2018) Prof. dr. Olof Bik Prof. dr. Jan Bouwens Details
 

Authors

Prof. dr. Olof Bik

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. Jan Bouwens

Academic board member and managing director FAR

Evidence does not support ‘conflict of interest’ worries Prof. dr. Jan Bouwens Details
 

Authors

Prof. dr. Jan Bouwens

Academic board member and managing director FAR

We moeten retoriek bestrijden! Prof. dr. Willem Buijink Details
 

Authors

Prof. dr. Willem Buijink

Academic board member for FAR, Willem Buijink, emeritus, taught financial and management accounting and conducts research in financial accounting, tax accounting and auditing. He was Vice Dean Education of TiSEM until the end of 2009. Prior to that he was Vice Dean Research of TiSEM. He chaired the TiSEM Department of Accountancy from 2001 to 2005. Prior to coming to Tilburg, in 2001, Professor Buijink was Professor of Accounting at Maastricht University where he chaired the Department of Accounting and Finance. He is co-founder of the MARC. Professor Buijink started his academic career at the University of Antwerp. His current research interests include the economics of financial accounting, financial accounting regulation and the historical development of financial accounting. He currently serves as an Associate Editor of the Dutch language business economics academic journal MAB. He chaired the first Standing Scientific Committee of the European Accounting Association from 2005 to 2007. From October 1, 2013, he was for a year the EIASM Academic Director, in Brussels. Since April 2015 he is Professor of Accounting (part-time) at the Dutch Open University in Heerlen.