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New technologies like data analytics, artificial intelligence (AI), and smartphones are profoundly changing the work of auditors. Yet, we still know relatively little about how these digital tools influence auditors’ thinking and decision-making. Sara Bibler’s research sheds light on this and shows that not only technology, but especially the interaction between people and technology, determines the quality of audits.

Innovative mindset strengthens fraud detection

The research shows that auditors who are encouraged to think more innovatively perform better in a data-analytic work environment. They detect fraud more effectively, provide more useful insights for clients, and work more efficiently. According to Bibler, this emphasizes that technological progress alone is not enough: the way professionals think and work plays a crucial role.

Smartphone or laptop makes a difference

Even seemingly small choices, such as the device used to send advice, appear to have an impact. Advice shared via a smartphone is, on average, less critical and skeptical than advice prepared via a laptop, especially when auditors are deeply engaged in the task. When auditors have more psychological distance from the assignment, this difference largely disappears.

This finding suggests that the context in which professionals work can have subtle effects on their judgment. This may prompt organizations to be more mindful of their communication channels in situations where critical judgment is essential.

Doubts about AI’s dominant role

Bibler further shows that auditors are less inclined to trust advice when AI plays a leading role in audit preparation, compared to situations where AI only plays a supporting role. Auditors with a less innovative mindset, in particular, appear to be hesitant. This means that the way AI is integrated into work processes can significantly determine how effectively this technology is ultimately used.

Broad societal impact

The results are relevant for accounting firms, supervisory bodies, and policymakers. They demonstrate that audit quality depends not only on technological innovation but also on human factors such as mindset, work context, and trust.

For organizations, this means that investing in technology must go hand in hand with attention to training, work processes, and behavior. For supervisory bodies, the research emphasizes that rules and guidelines must consider the human side of digitalization.

At a time when AI and digital tools are rapidly gaining ground, the research shows that successful innovation is not just about new systems, but especially about how people work with them.

On 24 February Sara Bibler (in the middle of the picture with Academic Director Anna Gold and COO Klaas Springer of FAR) defended her dissertation about how technology and innovation are becoming increasingly embedded into the auditing process. Data analytics, communication tools, and artificial intelligence shape how auditors perform their work, collaborate with one another, and evaluate evidence.

Yet these advancements do not operate in isolation. In a profession with high judgment, such as auditing, quality continues to depend critically on the human auditors who interact with technology. This dissertation examines how auditors’ mindset, the medium through which they communicate, and the mode by which technology is embedded into workflows influence auditors’ professional skepticism, judgment, and reliance.

Across three experimental studies, this dissertation highlights behavioral dynamics that emerge in technology-enabled audit environments. The first study shows how cultivating an innovation mindset enhances fraud judgments and supports auditors in balancing audit quality and client insight objectives. The second study demonstrates that the device used in digital communication can shape the way skepticism is conveyed in audit advice. The third study reveals that auditors’ reliance on AI–human hybrid specialist advice is sensitive to how AI is positioned in the workflow and to auditors’ openness to innovation.

Together, these studies underscore how certain factors in a technology-driven environment can influence judgments and communication, in turn influencing audit quality.

Generative AI systems (“GenAI”) can provide auditors with natural-language recommendations that resemble professional advice. Such tools have the potential to support audit judgments. However, a lack of transparency in their processes and reasoning also raises practical questions: when, and to what extent, should auditors rely on AI-generated advice?

Because GenAI recommendations are not directly explainable, auditors must rely on indirect cues to assess credibility. In practice, a key indirect cue is AI performance. Firms and software providers commonly disclose stated accuracy levels, either framed in terms of accuracy (“the AI system is 95% accurate”) or in terms of error (“the AI system has a 5% error rate”).

Framing AI performance in terms of either “accuracy” or “error” may affect auditors’ reliance in unanticipated ways. The key issue for audit practice is whether these performance cues support appropriate calibration. That is, auditors should use sound advice but remain skeptical of weak output.

In this practitioner report, we summarize evidence from an experimental study with practicing auditors examining the effects of stated accuracy and performance framing on reliance on high-quality and low-quality GenAI advice. Our findings show that performance communication influences reliance decisions, with implications for the design and implementation of GenAI in judgment-intensive audit tasks.

Private equity (PE) is rapidly transforming the SME audit market. But what are the consequences of the arrival of PE for partner appointments, career opportunities, talent development, and firm growth?

In this masterclass, members of the research team (Ulrike Thürheimer, Tjibbe Bosman, Simon Dekeyser and Ziloy Croughs) will present the initial findings of a unique FAR study on the impact of PE on the Dutch accountancy profession. Drawing on recent and extensive Dutch data, the masterclass offers an exclusive insight into these changes.

The session will also address prior research on PE and, of course, will discuss potential practical implications of the findings.

The masterclass will be highly interactive and will encourage discussion. We welcome you at 14.30 hrs, the masterclass itself starts at 15.00 hrs and to wrap up, we invite you to join us for drinks and snacks from 16:30 to 17:30 hrs.

Register now (limited availability)!

In his paper on regulation, Jere Francis explains why audits are regulated. Audits are regulated because the major parties (auditors and their clients) settle for lower levels of assurance. Society requires higher levels of assurance since they (e.g., future shareholders, banks, employees, customers) benefit
from higher levels of assurance. Legislation and regulation purportedly motivate auditors to set higher levels of assurance (and thus audit quality). However, since auditors are required to produce on average a
higher level of quality audit than the market requires, and arguably incur higher costs than the client is willing to pay, the question is who foots the bill for the higher cost: the auditor, the client, future shareholders, banks, society as a whole? Read Jere’s insightful paper. It is important to understand
why under the current system there will always be tension between what the firms believe is an appropriate level of assurance versus what auditors are expected to deliver.

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.

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.

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.