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.

Challenges in Global Group Audits: Evidence from Component Audit Leaders

Regulators and standard setters have expressed concerns about global group audit (GGA) quality, as deficiencies in group audits account for a significant proportion of all audit deficiencies worldwide. To explore how both the group and component auditor processes and behaviors impact the quality of component audits, we conduct an experiential questionnaire with 86 experienced component audit (CA) leaders. The qualitative responses confirm regulators’ concerns about insufficient involvement of group auditors in the component audit. Specifically, CA leaders experience a lack of group auditor involvement in the staffing, planning, and fieldwork phases of the component audit, as well as insufficient review of component auditor work. Regulatory and cultural barriers, along with insufficient fees, pose further challenges for CA teams. However, CA leaders also report positive experiences, perceived to improve audit quality, when group auditors work collaboratively with CA team during planning and fieldwork.

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Online Masterclass on Improving the quality of global group audits

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 masterclass

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The effects of expert status on the audit of complex estimates

Auditing complex estimates frequently requires input from specialists. However, auditors struggle to assess specialists’ capability and work quality, in part because auditors by definition lack the expertise to precisely evaluate a specialist’s skills and work processes. Specialists can improve the audit of estimates, but any potential improvement first requires appropriate assessments of the adequacy of specialist’s work. Specifically, scholarly literature provides evidence that complex estimates provide client management with leeway to report in a manner consistent with its incentives, and that specialists are often hesitant to challenge these estimates. Thus, overestimating the specialist’s skills or work quality may lead the auditor conclude that an estimate is reasonable based on insufficient evidence, increasing audit risk and reducing financial reporting quality. This study examines whether a specialist’s high status leads to higher auditor evaluations of specialist work quality and greater reliance on this work as persuasive evidence. By status, we refer to prestige indicated by the respect of peers, elite university or company affiliations, and/or membership in exclusive social circles. U.S. and international auditing standards direct auditors to assess specialists based on information such as the specialist’s experience with an audit issue, but also on “softer” factors such as the specialist’s credentials, reputation, and standing among peers. The IAASB has recently expressed concern about auditor “over-reliance on the qualifications of the expert with no further consideration as to their appropriateness.”

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Sent from Mobile – The Influence of Communication Devices and Psychological Distance on Professional Skepticism Enhancing Advice

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 or 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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4th FAR International Conference booklet

The fourth annual conference of the Foundation for Auditing Research (FAR) was held in June 2019. The theme of the conference was ‘Evidence-informed policy making for the future of the auditing profession’. Therefore, the central question during all the presentations of this conference was: how can evidence-based auditing sector policy making be implemented? We are happy to offer you this conference report, which summarizes the keynote speeches and the FAR project presentations of preliminary research findings.

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5th FAR International Conference booklet

The fifth annual FAR Conference was held on Monday June 22, 2020. As a result of the circumstances, the event took place in an online, Covid-19-proof setting. Still, almost 200 participants from all over the world registered for this virtual meeting. About 50 percent of these were academics. The other 50 percent consisted of students, practitioners, regulators and government officials. This strengthens our belief that a broad group of stakeholders appreciates the work of our Foundation. The theme of the conference was intentionally broad: ‘academic and practitioner insights into audit quality’. This theme seamlessly fits with FAR’s main purpose, which is facilitating knowledge development and knowledge dissemination concerning audit quality. In this booklet, we proudly present the summaries of the five conference presentations. At the end of each article, a selection is included of three Q&A’s from the Q&A sessions that took place after each presentation. We hope you will enjoy reading the summaries and viewing the presentations and Q&As, and we are looking forward to meeting you again, hopefully ‘in the flesh’, next late Spring 2021.

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Tien jaar Foundation for Auditing Research verleden, heden en toekomst

De Foundation for Auditing Research (FAR) viert haar tienjarig jubileum. Ter gelegenheid van deze bijzondere mijlpaal presenteren wij met trots deze jubileumpublicatie. In het afgelopen decennium is FAR uitgegroeid tot een uniek platform waar gedegen academisch onderzoek en de accountantspraktijk op een constructieve en waardevolle manier samenkomen. Wat FAR bijzonder maakt, is niet alleen de toegang tot rijke, praktijkgerichte auditdata, maar vooral de voortdurende dialoog tussen onderzoekers en accountants. Dit boekje laat zien hoe FAR deze samenwerking tot leven brengt. Het bevat een interview met de vertrekkende academic director Jan Bouwens en zijn opvolger Anna Gold. Hun reflecties bieden zowel een persoonlijke als institutionele kijk op de ontwikkeling van FAR in de afgelopen tien jaar en de koers die voor de toekomst is uitgezet. Het interview laat zien hoe FAR’s missie, het dichter bij elkaar brengen van wetenschap en praktijk, is uitgegroeid van een ambitie tot een alledaagse realiteit, en benadrukt tegelijkertijd waar nog verdere stappen gezet kunnen, en moeten, worden. Om de gemeenschappelijke basis tussen wetenschap en praktijk te illustreren, bevat dit boekje daarnaast vier projectbeschrijvingen. Elke beschrijving belicht kort een FAR-gerelateerde studie, gevolgd door het perspectief van een onderzoeker en een reflectie van een praktijkprofessional. Deze bijdragen onderstrepen dat FAR-onderzoek een vorm van co-creatie is: niet over de praktijk, maar samen met de praktijk.

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Professional skepticism and audit committee support

This literature review explores how audit committee involvement can enhance auditors’ application of professional skepticism which is a critical factor for audit quality. It synthesizes research on auditor traits, knowledge, and incentives, highlighting barriers such as time pressure, budget constraints, and outcome bias that discourage skepticism.

The review also examines how audit committees can support auditors beyond oversight, including through direct communication and fostering a supportive culture, to reduce these barriers. Findings suggest that audit committee support, when effectively conveyed, may strengthen skepticism and improve audit quality.

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An unintended consequence of full population testing on auditors’ professional skepticism

This study examines how the use of full population testing (FPT), enabled by data analytics, affects auditors’ professional skepticism. While FPT improves the sufficiency (quantity) of audit evidence by testing entire populations, it often relies on client-internal data, which may lack appropriateness (quality) and be vulnerable to management manipulation. Auditing standards emphasize that more evidence cannot compensate for poor quality, making external evidence critical for fraud detection.

The authors hypothesize that auditors using FPT may exhibit attribute substitution bias, substituting their judgment of evidence sufficiency for appropriateness. This bias could reduce skeptical actions when external evidence later reveals fraud red flags. In an experiment with 125 auditors, results show:

Auditors using FPT were 52% less likely to act skeptically (e.g., inquire about inconsistencies or alert managers) compared to those using sample testing when confronted with an external fraud indicator.
FPT inflates perceptions of evidence appropriateness because auditors perceive it as more sufficient.
Contrary to expectations, presenting FPT results visually (graphs) versus in tables did not significantly worsen the effect.
Experience with FPT amplifies the bias, meaning more experienced auditors are even less skeptical after using FPT.

The findings highlight a critical unintended consequence of advanced audit technologies: auditors may underreact to fraud risks when over-relying on internal evidence tested via FPT. Audit firms and regulators should address this through training and quality controls, emphasizing the distinction between evidence sufficiency and appropriateness and reinforcing the importance of external evidence.

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Auditor Reporting for Going-Concern Uncertainty – Research Findings and implications for practitioner

The auditor’s decision regarding a going concern opinion (GCO) is among their most important judgments, as GCOs impact the client company, markets, financial statement users, and auditors themselves. Such a sensitive and complex judgement call requires expertise and experience. In the academic literature, GCO decisions are often seen as related to audit quality, and they are among the few observable outcomes of the audit that vary across engagements. In the last decades, academic researchers have spent considerable effort examining GCO decisions. We believe that audit practitioners can benefit from improved awareness of the insights that research has generated. In our complete report (Geiger, Gold, and Wallage, 2019), we review and synthesize 149 academic studies authored since 2013, the end of the previous synthesis by Carson et al (2013). In this practitioner note, we make a selection of what we deem the most interesting insights from our review, and discuss their implications for practice. We then report on our focus group engagement with audit practitioners where we obtained their perceptions regarding some the academic findings, the issues faced in making GCO decisions, as well as areas where additional research would be helpful.

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How AI’s role and an innovation orientation influence auditor reliance on a hybrid specialist team’s advice

As artificial intelligence becomes a staple in audit engagements, firms increasingly pair AI with human specialists to tackle complex estimates. But does the way these roles are structured, AI as the preparer or as the reviewer, change how much auditors trust the advice? And can an auditor’s openness to innovation make a difference?

This review explores the following key dynamics:

Workflow roles matter. When AI prepares an estimate and a human reviews it, auditors tend to rely less on the advice, driven by algorithm aversion and concerns about overreliance on technology. Conversely, when the human prepares and AI reviews, auditors perceive the advice as more credible and are more willing to challenge management.
Transparency and uncertainty. If auditors know AI is involved but not its role, uncertainty amplifies skepticism, further reducing reliance.
Innovation orientation as a buffer. Auditors who are more open-minded and comfortable with new ideas, those with a high innovation orientation, are less prone to algorithm aversion and more willing to integrate hybrid advice into their judgments.

The study argues that as AI adoption accelerates, audit firms must consider not only how they assign roles within hybrid teams but also how they foster innovation-oriented thinking among auditors. Doing so can help overcome biases, improve reliance on high-quality advice, and ultimately enhance audit quality.

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Can Prior Consultations with Specialists Backfire on Auditors?

As advanced audit data analytics (ADA), including artificial intelligence, become increasingly sophisticated, auditor consultations with in-house ADA specialists are likely to become commonplace. We examine whether auditors’ prior ADA consultation experience affects their superiors’ reliance on the auditors’ ADA work performed independently of specialists. On one hand, learning through prior specialist consultation may enhance auditors’ technological proficiency, increasing superiors’ reliance on their ADA testing. On the other hand, a history of consultation may signal dependence on specialists. This signal may conflict with superiors’ expectations that auditors can perform ADA tasks independently and trigger a backlash effect that ultimately undermines reliance. In an experiment, we find that when an audit senior has prior experience consulting with ADA specialists, audit managers evaluate the senior as more competent, yet rely less on the senior’s independent ADA work. This pattern is consistent with a backlash effect. We observe that this backlash effect occurs even when the subordinate’s ADA skills are low. This unexpected result is concerning, as backlash may discourage consultation even among auditors with lower ADA skills who need it most for learning and skill development. Our findings highlight the importance of managing interpersonal dynamics within engagement teams when incorporating ADA into audits.

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