Andrew J. Trotman is Assistant Professor of Accounting at the Coles College of Business, Kennesaw State University. He earned his PhD in Accounting from Bond University and holds a Master of Accounting and a Bachelor of Business from Griffith University. Before joining Kennesaw State, Andrew served as Assistant Professor at Northeastern University and as a Visiting Lecturer at the University of New South Wales. His professional background includes experience in audit and advisory services, which informs his research and teaching.Andrew’s research focuses on judgment and decision-making in auditing, corporate governance, and sustainability reporting. He examines how audit committees, internal auditors, and external auditors interact to influence audit quality and financial reporting outcomes. His work addresses topics such as professional skepticism, audit committee effectiveness, global group audits, and assurance on sustainability disclosures. He has published in leading journals including The Accounting Review, Auditing: A Journal of Practice & Theory, Accounting, Organizations and Society, and Contemporary Accounting Research. Recent projects explore challenges in multinational group audits and the role of assurance providers in improving sustainability reporting quality.Andrew teaches courses in financial accounting and auditing and actively collaborates with international scholars and standard-setting bodies to bridge academic research with practice. His work has been supported by research grants from organizations such as the IAASB and IAAER, contributing to evidence-based improvements in audit standards and governance practices.
This masterclass, presented by Anna Gold and Andrew Trotman, discusses the challenges and drivers of audit quality in global group audits, specifically from the perspective of component auditors (local auditors auditing a specific subsidiary). Their insights are based on a study surveying 86 component audit leaders in the Netherlands who worked with group auditors from the UK and Germany.
Key Takeaways:
The “Black Box” of Component Audits: While regulators often focus on the group auditor, this study reveals that component auditors frequently face significant challenges due to the behavior of the group auditor.
Staffing & Planning Issues: A major frustration is the lack of timely communication. Group auditors often provide instructions too late, leading to scheduling conflicts during busy seasons or holidays. Additionally, budgets are frequently set too low to form an experienced team.
The “Review” Gap: A striking finding is that less than half of the component auditors received any review comments or feedback from the group auditor. This lack of interaction makes component auditors feel unimportant and demotivated, which negatively impacts audit quality and opportunities for learning.
Cultural Mismatches: The study highlights friction caused by cultural differences, such as the perceived stricter audit standards in the Netherlands compared to other jurisdictions, and differences in communication styles (e.g., Dutch directness).
Conclusion: To improve the quality of global group audits, there is a critical need for timely involvement and better communication from the group auditor. Providing adequate budgets and meaningful feedback (reviews) is essential to maintain the motivation and effectiveness of component audit teams.
Watch the summary of the online masterclassFilter projects: