Anna Gold

Director of the Foundation for Auditing Research and Professor of Auditing

Anna Gold is Professor of Auditing at Vrije Universiteit Amsterdam. Since 1 September she is also the Academic Director of the Foundation for Auditing Research. She is internationally recognized for her research on audit judgment and decision-making. With her strong academic background and practical focus, she plays a key role in connecting research with audit practice. In her role at FAR, she leads efforts to promote impactful and independent audit research.

Thinking Outside of the Box: Engaging Auditors’ Innovation Mindset to Improve Auditors’ Fraud Actions in a Data-Analytic Environment

Data analytics can help auditors effectively respond to the risk of material misstatement due to fraud. However, harnessing this potential may require auditors to adopt an innovation mindset as urged by firms and regulators. Innovation is defined as creativity in action. Building on the creativity literature, we develop an innovation mindset designed to improve auditors’ ability to generate effective fraud audit procedures when interpreting data analytic output. Further, with the advent of data analytics, auditors are asked to provide value-added, client insights, in addition to their primary goal of obtaining high audit quality. We predict that incorporating this secondary goal may strengthen the innovation mindset effect by enhancing auditors’ cognitive flexibility. We experimentally demonstrate that the innovation mindset significantly improves auditors’ development of effective fraud procedures. Moreover, this effect is amplified when auditors generate client insights, as this intervening goal boosts creativity and cognitive flexibility, further enhancing auditors’ decision-making quality.

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Practitioner Perspectives on Going Concern Opinion Research and Suggestions for Further Study

A two-part article published in Accounting Horizons Part 1 – Outcomes and Consequences Abstract: Auditing researchers rarely engage practicing auditors regarding the phenomena examined, or conclusions reached, in academic research. In an attempt to bridge this gap, we report on the outcomes, insights, and observations from focused interactions with Dutch audit practitioners regarding their perspectives on recent research regarding auditor going-concern opinion (GCO) decisions. We provided practitioners with a summary of some of the most salient recent GCO research findings and the goals of our subsequent discussions were to (1) obtain practitioners’ responses to the research findings, and (2) identify relevant issues for future study from the perspective of practitioners. Accordingly, we report on our discussions with practitioners and provide a summary of practitioner-informed GCO-related future research topics. In this first of a two-part sequence, we provide background information relating to our practitioner interactions, and summarize our discussions pertaining to GCO outcomes and GCO consequences, as well as future research. Part 2 – Reporting Environment and the Decision-Making Process Abstract: Auditing researchers rarely engage practicing auditors regarding the phenomena examined, or conclusions reached, in academic research. In an attempt to bridge this gap, we report on the outcomes, insights, and observations from focused interactions with Dutch audit practitioners regarding their perspectives on recent research regarding auditor going concern opinion (GCO) decisions. We provided practitioners with a summary of some of the most salient recent GCO research findings. The goals of our subsequent discussions were to (1) obtain practitioners’ responses to the research findings, and (2) identify relevant issues for future study from the perspective of practitioners. Accordingly, in this second of a two-part sequence of articles, we discuss the outcomes of our interactions with practitioners related to the GCO reporting environment and the GCO decision-making process, as well as directions for future research.

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Inheriting vs. Developing Data Analytic Tests and Auditors’ Professional Skepticism

Auditors’ use of audit data analytic (ADA) tests carries tremendous potential for the quality of financial statement audits and auditors’ application of professional skepticism (e.g., Austin, Carpenter, Christ, and Nielson 2021). As the use of ADA tests becomes increasingly established in practice, auditors will likely transition from developing ADA tests themselves to a situation where they typically inherit ADA tests developed by others. For example, auditors may inherit ADA tests that are developed by other members of their audit team or their firm’s centralized analytics team. In this study, we argue that inheriting ADA tests, as opposed to developing ADA tests by themselves, hinders auditors’ application of professional skepticism because inheriting decreases auditors’ psychological ownership of the tests. In an experiment where an ADA test identifies a fraud red flag, we find that auditors who inherited the ADA test are less skeptical than those who personally developed the ADA test. We further provide evidence that informing auditors who inherited the ADA test about the test development activities can substantially boost auditors’ skepticism levels. In practice, this development-related information could be conveyed via an ADA test development memorandum preceding the workpapers containing the ADA test. Informing auditors about ADA test development activities will likely become more important as auditors inherit more advanced forms of ADA tests, such as tests employing artificial intelligence technology.

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Inheriting vs. Developing Data Analytic Tests and Auditors’ Professional Skepticism

As the use of audit data analytic (ADA) tests matures and becomes increasingly common in practice, auditors will transition to a situation where they typically inherit ADA tests developed by others (e.g., other audit team members or a centralized data analytics team). Despite the potential benefits of ADA, using ADA tests inherited from others, rather than developed by auditors themselves, could hinder auditors’ application of professional skepticism due to their lack of psychological ownership of the ADA tests. In an experiment where an ADA test identifies a fraud red flag, we find that auditors who inherited the ADA test are less likely to exercise professional skepticism compared to those who were personally involved in the development of the ADA test. We then provide evidence that informing auditors who inherited the ADA test about the test development activities (e.g., a brief ADA memorandum documenting the ADA’s development) boosts their skepticism levels.

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Practitioner Perspectives on Going Concern Opinion Research and Suggestions for Further Study: Part 2—Reporting Environment and the Decision-Making Process

Auditing researchers rarely engage practicing auditors regarding the phenomena examined, or conclusions reached, in academic research. In an attempt to bridge this gap, we report on the outcomes, insights, and observations from focused interactions with Dutch audit practitioners regarding their perspectives on recent research regarding auditor going concern opinion (GCO) decisions. We provided practitioners with a summary of some of the most salient recent GCO research findings. The goals of our subsequent discussions were to (1) obtain practitioners’ responses to the research findings, and (2) identify relevant issues for future study from the perspective of practitioners. Accordingly, in this second of a two-part sequence of articles, we discuss the outcomes of our interactions with practitioners related to the GCO reporting environment and the GCO decision-making process, as well as directions for future research.

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Does status equal substance? The effects of specialist social status on auditor assessments of complex estimates

Accepted for publication in TAR: Auditing standards require that auditors’ reliance on a specialist is commensurate with the specialist’s competence. In assessing competence, auditors encounter cues diagnostic of the specialist’s social status but less so of competence. In an experiment, we manipulate specialist status and find that auditors mistake status for competence unless they are prompted to separate the constructs. This raises the possibility that auditors could over-rely on high-status specialists. However, auditors also assess high-status specialists as more influential and, when the specialist disagrees with the client, they rely more on high-status specialists because of this perceived influence. Thus, high-status specialists can increase auditors’ willingness to challenge the client by providing a strong ally. Additional analyses suggest that auditors are aware that they rely on the specialist’s influence rather than competence, indicating that auditors do not use the process that auditing standards envision to evaluate and rely on specialists.

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An Unintended Consequence of Full Population Testing on Auditors’ Professional Skepticism

The emergence of data analytics allows auditors to test entire populations of data drawn from clients’ information systems, rather than relying solely on sampling methods. While full population testing increases the sufficiency – or quantity – of evidence examined, it typically relies heavily on client-internal data. Therefore, auditors must remain skeptical when subsequent, more appropriate evidence from external sources contradicts a client’s financial reporting. In an experiment, we find that auditors using full population testing, compared to sample testing, are less likely to subsequently exercise skeptical actions when an external, industry growth trend reveals a fraud red flag. We do not find that this unintended consequence is exacerbated when full population testing results are visualized (versus tabulated), a typical format used for presenting data analytic tests in practice. Main Takeaways

Auditors using full population testing, compared to sample testing, are less likely to exercise skeptical actions when subsequently confronted with a fraud red flag revealed by an external industry growth trend.
Auditors using full population testing, compared to sample testing, overestimate their evaluation of the appropriateness of client-internal evidence. Presenting the testing results in a visualized compared to tabulated form does not exacerbate the negative effect of full population testing on auditors’ skeptical actions.

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An Unintended Consequence of Full Population Testing on Auditors’ Professional Skepticism

KEY TAKE-AWAYS The emergence of data analytics allows auditors to test entire populations of data, rather than relying solely on sampling methods. While full population testing increases the sufficiency, or quantity, of evidence examined, it does not necessarily eliminate its lack of appropriateness, or quality. In particular, full population testing typically relies on client-internal data, which are vulnerable to management manipulation, potentially reducing their appropriateness. Therefore, auditors must remain skeptical when subsequent, more appropriate evidence from external sources contradicts a client’s financial reporting. We examine whether auditors employing full population testing mistakenly substitute their assessment of evidence sufficiency for their evaluation of evidence appropriateness, leading them to view client-internal evidence as more appropriate than auditors using sample testing. Consequently, auditors using full population testing may be less likely to act skeptically when subsequent, more appropriate external evidence reveals a fraud red flag. In an experiment, we find that auditors using full population testing, compared to sample testing, are less likely to exercise skeptical actions when a subsequent external industry growth trend reveals a fraud red flag. We also posit that this unintended consequence is exacerbated when full population testing results are visualized (versus tabulated). However, our findings do not support this prediction.

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“Sent from Mobile”: The Influence of Communication Devices and Psychological Distance on Professional Skepticism-Enhancing Advice

Abstract: As audit firms increasingly rely on mobile phones for work-related tasks, understanding how different communication devices impact auditor behavior is essential for maintaining professional skepticism and audit quality. Using a setting where an audit supervisor writes a message in response to advice sought by a subordinate auditor, we examine how the audit supervisor’s use of different communication devices (mobile phone versus PC) affects the extent to which their informal advice to the subordinate contains skepticism-enhancing language. We predict that audit supervisor’s advice will be less skepticism-enhancing for the subordinate when communicated by a message sent through a mobile phone compared to a PC. However, this effect is expected to be stronger for advisors with lower compared to higher psychological distance to the task workflow. We conduct a 2×2 between-participants experiment and use Linguistic Inquiry and Word Count (LIWC) textual analysis to measure skepticism in participants’ responses to advice sought by a subordinate. We find that a message conveyed through a mobile phones compared to a PC contains less skepticism-enhancing advice, but only when psychological distance is low. Our study underscores the behavioral implications of device choice and psychological distance, offering important insights for audit firms and practitioners as they navigate the increasing use of digital communication tools in fostering audit quality.

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Auditors’ Going Concern Decisions: Insights from Practice

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. The authors 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).

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Practitioner Perspectives on Going Concern Opinion Research and Suggestions for Further Study: Part 1—Outcomes and Consequences

Auditing researchers rarely engage practicing auditors regarding the phenomena examined, or conclusions reached, in academic research. In an attempt to bridge this gap, we report on the outcomes, insights, and observations from focused interactions with Dutch audit practitioners regarding their perspectives on recent research regarding auditor going concern opinion (GCO) decisions. We provided practitioners with a summary of some of the most salient recent GCO research findings and the goals of our subsequent discussions were to (1) obtain practitioners’ responses to the research findings, and (2) identify relevant issues for future study from the perspective of practitioners. Accordingly, we report on our discussions with practitioners and provide a summary of practitioner-informed GCO-related future research topics. In this first of a two-part sequence, we provide background information relating to our practitioner interactions, and summarize our discussions pertaining to GCO outcomes and GCO consequences, as well as future research.

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The first decade of the FAR: past, present and future

This commemorative booklet marks the tenth anniversary of the Foundation for Auditing Research (FAR). It reflects on FAR’s journey as a unique platform where academic research and audit practice meet to advance audit quality. The publication highlights:

FAR’s Mission and Impact: How FAR evolved from an ambition into a reality, fostering collaboration between researchers and practitioners through access to real-world audit data.
Insights from Leadership: An interview with founding academic director Jan Bouwens and his successor Anna Gold on FAR’s achievements, challenges, and future priorities.
Research Highlights: Four featured studies on topics such as auditors’ commercial efforts, student expectations versus auditor experiences, data analytics and professional skepticism, and learning within audit teams.
Key Figures and Projects: An overview of FAR’s outputs, including practice notes, masterclasses, conferences, and a growing portfolio of research projects.

The booklet not only looks back with pride but also outlines ambitions for the future of strengthening knowledge transfer, increasing practical usability of research, and deepening engagement across audit firms and academia.

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