Lena Pieper

Assistant Professor

Lena Pieper is an Assistant Professor of Accountancy at the Gies College of Business, University of Illinois Urbana-Champaign. She earned her Ph.D. in Accountancy from Maastricht University’s School of Business and Economics, where her research focused on auditing, leadership, and team dynamics. Lena previously spent time at Gies as a visiting Ph.D. scholar in 2022 before joining the faculty.Her research examines the human side of auditing, exploring how personality traits and leadership behaviors of audit partners and managers influence team functioning and audit quality. Drawing on psychology and organizational behavior theories, Lena’s work provides insights into improving audit processes through better understanding of team dynamics. She has collaborated with major audit firms and contributed to FAR projects investigating auditor performance and leadership.Lena’s publications and presentations address topics such as audit firm culture, partner-manager dyads, and the impact of personality on job performance. She is passionate about bridging academic research and practice to enhance audit quality and professional development in the accounting field.

Does Personality Relate to Job Performance of Partners and Managers?
Recent audit partner research finds that variation in partner characteristics affects the quality of audit engagements. Most of this research uses publicly available data on partner demographics such as age, gender, experience, industry expertise, and workload (busyness). In contrast, our study uses validated survey instruments to measure the personality traits of Dutch audit partners and managers. Contrary to what one might think, there is wide variation in the personality traits of auditors – they’re not homogenous. The organizational behavior (OB) literature documents the importance of personality in explaining job performance. Consistent with the OB literature, we find that personality traits do have a significant association with the job performance of audit partners and managers,  as assessed by audit firms in their annual performance reviews. There are direct effects of some personality traits on performance such as “extraversion” which is positively associated with performance. There are also indirect effects on performance in which personality traits affect job skills (technical, commercial, leadership) and these job skills, in turn, affect job performance. The study has implications for hiring, and for targeted training to better manage the effects of diverse personality traits among auditors. Finally, there are implications for diversity. As people move from manager to partner, there is a narrowing of personality traits, and extroverted individuals are more likely to be rewarded and promoted to partner. Yet firms say they want diversity in their firms, and we argue that personality traits are an important dimension of diversity that firms need to explicitly manage.
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Does Personality Relate to Job Performance of Audit Partners and Managers?
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.  
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Audit Partner-Manager Dyadic Fit and Audit Team Functioning
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.  
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Partner-Manager Voice Modeling Behavior, and the Effects of Mixed Messages on Audit Teams
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.
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Francis Voice Modeling Behaviour (Slider)
Important take-away: managers and partners need to be trained in how to effectively demonstrate that they have a genuine commitment to psychological safety and a strong climate for team voice.  
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When Dual Team Leaders Model Voice Behavior: Boundary Effects of Involvement, Mixed Messages, and Stifling Hierarchy on Team Safety, Voice Climate, and Performance

Key Take-Aways
What leaders can do to help team members feel safe enough to create a climate of voice in a dual-leader

  1. The manager plays a key role in the team: voice-modeling behavior from the manager has a stronger association than the partner’s behavior. Need for leadership training to help managers demonstrate, through their own “voice” leadership behaviors, that there is an environment of psychological safety that enables voice for the audit
    team.
  2. Managers’ influence is accentuated when they are more involved and avoid mixed messaging (by not engaging in counterproductive RAQ acts).
  3. Partner’s voice role modeling may help in absence of the manager, but otherwise has a stifling effect (less actual team voice). More manager involvement cannot compensate for this.

The manager is the “team climate engineer” for the audit team.

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Understanding Audit Firm Culture through the Lens of the Competing Values Framework

KEY TAKE-AWAYS

Audit firm culture is viewed by regulators and inspectors as the means to enhance audit quality. This study uses the Competing Values Framework (CVF) to explore the culture of
large audit firms, and their attempts to change their cultures. We find that these firms predominantly emphasize a culture characterized by collaboration and control, which is consistent with an inward focus. We also find that audit firms struggle to implement a consistent understanding of culture across their offices and function levels, and there is a gap in how partners perceive culture compared to that of non-partner staff. This “culture gap” has negative consequences on auditors, as larger culture gaps are associated with lower psychological safety and poorer person organization fit. Embedding mechanisms can lower the culture gap, but having adequate resources is far more important of an embedding mechanism than “tone at the top.” The findings underscore the importance of actively communicating and reinforcing stated cultural values, and provide audit firms with a practical tool to diagnose problems in achieving culture change.

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It Takes Two to Make a Team Go Right
Today’s teams often have two formal leaders (i.e., dual leaders), yet research has almost exclusively examined the effects of a single, higher-level team leader’s behaviors on team members and team outcomes. This is problematic because these findings cannot unequivocally be applied to guide the use of dual-leader team structures. Using 93 professional service (i.e., audit) action teams, we examine effects of partner (i.e., external) and manager (i.e., internal) leaders simultaneously exhibiting initiating structure and individualized consideration leadership behaviors on team efficacy and, ultimately, team performance and team viability. Our findings show that the total capacity of leadership effects for a team with two leaders is only captured after considering the influence from both leaders simultaneously, especially when examining interactive effects between an individual leader’s behaviors and across two leaders’ behaviors. We find team efficacy is strengthened when the partner alone exhibits both higher structure and consideration, which is further augmented when the manager also exhibits higher consideration simultaneously. Thus, we find dual-leader interactions demonstrating the “Power of the Partner” and “Power of Consideration” effects are critical for building team efficacy, and in turn, team performance and team viability in dual-leader structures, revealing the existence of meaningful leadership interactions that cannot be found in single-leader studies.  
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FAR Conference 2022 Proceedings

On June 20-21 2022, the fifth physical conference of the Foundation for Auditing Research (FAR) was held at Nyenrode Business University. The theme of the conference was ‘Inside out and outside in’. This theme allowed for a broad array of sessions that took issue with the influence of internal (e.g., audit teams) and external (e.g., regulators) factors on the quality of auditing and assurance and attracted an audience comprised of practitioners, academics, regulators, standard setters and journalists. The majority of the more than 100 participants were practicing auditors (45 percent). Given FAR’s objective of using academic knowledge to improve audit quality in practice, this is a satisfying figure.

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Audit Partner-Manager Dyadic Fit and Team Functioning
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)
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When Dual Team Leaders Model Voice Behavior: Boundary Effects of Involvement, Mixed Messages, and Stifling Hierarchy on Team Safety, Voice Climate, and Performance
What leaders can do to help team members feel safe enough to create a climate of voice in a dual-leader: The manager plays a key role in the team: voice-modeling behavior from the manager has a stronger association than the partner’s behavior. Need for leadership training to help managers demonstrate, through their own “voice” leadership behaviors, that there is an environment of psychological safety that enables voice for the audit team. Managers’ influence is accentuated when they are more involved and avoid mixed messaging (by not engaging in counterproductive RAQ acts). Partner’s voice role modeling may help in absence of the manager, but otherwise has a stifling effect (less actual team voice). More manager involvement cannot compensate for this.
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Perspectives on Audit Firm Culture
AFM’s culture initiative aims to improve audit quality by changing internal cultures of audit firms. This initiative is based on the belief that internal culture influences audit quality and can be measured and changed. But there are important challenges, including the ability to measure culture, the link to audit quality, and the assessment of the costs and benefits of cultural changes. It also is unclear whether clients are willing to pay for increased audit costs resulting from cultural changes. To gain insights about audit firm culture, Francis’ research team interviewed senior leaders of the Big Four audit firms in the Netherlands to provide perspectives on their culture initiatives. These initiatives primarily focus on changing partner behaviors, emphasizing (audit) quality, and using feedback mechanisms. “A common concern among all four firms is that the focus on a zero-error culture comes at the expense of innovation and a neglect of the business side of the audit firms’ practices. A singular focus on a zero-error culture is probably not sustainable, given the commercial and business needs of the firms to be profitable.” The paper also outlines challenges specific to instilling culture in audit firms, such as their decentralized nature and reliance on small partner-led engagement teams. Francis proposes to use a survey based on the widely applied Competing Values Framework to measure perception of audit firm culture and assess the success of culture change initiatives.  
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