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This study examines the long-term evolution of audit pricing dynamics in a market characterized by continuous audit fee disclosure. Using data from the Dutch audit market over the period 2008-2019 and exploiting the 2014 EU Audit Reform as an exogenous fee shock, we analyze how audit fees adjust to prior-year mispricing. We find that audit fees exhibit mean-reverting behavior, with both overpricing and underpricing associated with subsequent fee adjustments. Further, results show that an exogenous fee-increasing shock temporarily increases fee dispersion. Under continuous fee disclosure, the availability of post-shock fee information facilitates pricing adjustments, with downward fee adjustments in the subsequent year. While bargaining power between auditors and clients is symmetric on average, clients exhibit stronger bargaining power in the one to two years following the fee-increasing shock. Taken together, our findings highlight the role of fee transparency in facilitating price adjustments and restoring pricing efficiency over time.

The findings of this project provide insights into how social learning from errors affects audit quality and how individual, relational, and organizational characteristics shape error learning. Together, these findings point to the following conclusions.

It is not how often an auditor seeks help that improves audit quality; it is how valuable that help is.
The findings show that seeking help frequently is, in itself, linked to lower audit quality. What matters is the learning value auditors derive from the help-seeking interactions they do have. Auditors who have access to a broader network of colleagues and gain more valuable learning from these interactions tend to achieve higher-quality outcomes.

It is not the personality of the auditor that drives learning; it is who the auditor can turn to and the error management climate of the firm.
Personality mainly shapes how many colleagues an auditor turns to, not how often they seek help or how valuable it is. What matters more is who they can turn to. The more accessible and psychologically safe a colleague is, the more auditors turn to them for help. Hierarchy especially drives the value of that help. Auditors learn most from hierarchically superior colleagues. While modest, the climate of the audit firm plays a role too. Help-seeking frequency remains largely the same regardless of whether the climate is open or blame-oriented, but an open error management climate especially improves how much auditors learn from the help they seek.

This masterclass explored how financial auditors integrate Environmental, Social, and Governance (ESG) information into their client risk assessments. Drawing on the FAR study “Expanding the Risk Lens in Financial Audits: Auditor Perceptions of ESG Integration,” presenters Andreea-Ioana Stanescu and Yasemin Zengin-Karaibrahimoglu shared insights from interviews with auditors and ESG specialists in the Netherlands. The session addressed the practical challenges of evaluating qualitative and forward-looking ESG data and examined the dynamics of collaboration between audit teams and sustainability experts.

In the current audit landscape, environmental, social, and governance factors are increasingly critical to financial risk assessment. However, integrating this information poses unique challenges. How do financial auditors determine which ESG issues are most relevant? Why do certain topics receive more focus than others? And how do audit teams navigate complex, hard-to-measure data?

During this interactive masterclass, recorded on 9 September 2026, researchers from the University of Groningen discussed the initial findings of their FAR-funded study, conducted alongside colleagues from Alliance Manchester Business School and the Stockholm School of Economics. Based on extensive interviews with professionals from Big Four and medium-sized audit firms across the Netherlands, the presentation fostered an engaged discussion on translating qualitative ESG information into concrete financial risks. Viewers will gain valuable insights into the current state of ESG integration and explore the evolving methodologies required to prepare the audit profession for the future.

Voor studenten en jonge accountants is de keuze tussen een Big 4- en een non-Big 4-kantoor belangrijk voor hun verdere loopbaan. Inzicht in de verschillen tussen Big 4- en non-Big 4-kantoren kan deze kantoren helpen bij het aantrekken, ontwikkelen en behouden van talent. Op basis van een vragenlijst onder 161 werkzame jonge accountants in de controlepraktijk bij Nederlandse Big 4- en non-Big 4-kantoren is onderzocht of jonge accountants verschillen ervaren in hun werk-privébalans en ontwikkelingsmogelijkheden. Ook is onderzocht of bij een Big 4- of non-Big 4-kantoor werkzame jonge accountants verschillende persoonlijkheidskenmerken hebben. De onderzoeksresultaten wijzen op een duidelijke afweging tussen werkdruk enerzijds en ontwikkelinfrastructuur anderzijds. Kantoren kunnen deze afweging gebruiken om zich te positioneren ten aanzien van potentiële medewerkers.

While prior studies have examined specific aspects of attracting and retaining qualified auditors, an integrative framework for understanding the different stages of an auditor career and how these stages interact over time to shape auditor human capital and professional identity is lacking. We address this gap by synthesizing the literature along the Auditor Career Path framework, which we conceptualize as comprising six stages: Attraction, Recruitment, Onboarding, Development, Retention, and Separation. By organizing and integrating existing research within this framework, we identify gaps in the current understanding of auditors’ career paths, including how frictions and interventions at one stage propagate to others, and derive insights to help audit firms more effectively attract, develop, and retain their human capital, while also outlining a research agenda that connects these stages for future work.

Save the date for the FAR Conference 2027 on 31 May to 1 June 2027.

The FAR Conference brings together academics, practitioners and regulators to exchange insights, discuss research and connect with peers.

Further information about the conference theme, program, speakers and registration will follow.

The extent to which audit quality meets the expectations of stakeholders can lead to heated debates. One reason is that the level of attained audit quality is comprised of objective and subjective elements. In this paper we propose a set of measures defined by the output the user of financial statements expects: error detection and correction and opinions/advice based on sufficient audit evidence. We argue that detection/correction and opinions are determined by input factors like adequate effort and team composition and choice of the adequate procedures. These audit-firm choices, in turn depend on an adequate assessment of the auditee characteristics by the audit firm which assessment, in turn, is determined by the structure or the audit firm itself.

Four insights from the literature on the effects of AI on audit practice

1. AI is improving audit quality and efficiency

The literature consistently shows that, when properly implemented, AI strengthens audit effectiveness. AI helps auditors to identify fraud risks, detect misstatements, analyze entire populations of transactions rather than samples, and reduce human error. What is more, it automates repetitive and time-consuming tasks, allowing audits to be completed more efficiently.

Key message: Overall, AI is enhancing both the effectiveness and efficiency of audit engagements, supporting the profession’s ability to provide timely and reliable assurance.

2. AI changes auditors’ work experience in both positive and negative ways

AI introduces new demands on individual auditors by requiring additional skills and creating uncertainty about future professional roles. These developments may increase mental load and psychological strain. At the same time, AI reduces auditors’ workload and involvement in repetitive tasks, enabling them to focus on more meaningful and value-adding work. The result is a dual effect, where AI simultaneously increases stress while also improving job experience and perceived meaningfulness of auditors’ work.

Key message: Understanding how AI affects auditors’ well-being, engagement, motivation, and job satisfaction is highly relevant.

3. Professional judgment becomes the central challenge

An important concern emerging from the literature is the effect of AI on auditors’ professional judgment and skills. As AI increasingly handles data collection, processing, and basic analytical work, auditors have fewer opportunities to engage in experiential learning, which is essential for building professional judgment and expertise. Reduced exposure to traditional audit tasks may hinder the development of professional expertise and skepticism, particularly among junior auditors. This risk is amplified by the fact that AI can sometimes produce inaccurate outputs that require careful critical evaluation. This creates a challenge: AI imperfections increase the need for critical judgment while potentially weakening some of the mechanisms through which that judgment is developed.

Key message: Future success with AI in auditing will depend not only on technological capabilities but also on maintaining and strengthening auditors’ professional skepticism, independent judgment, and ability to challenge AI-generated outputs.

4. AI should be viewed as an interconnected system of benefits and risks

The literature review demonstrates that AI simultaneously creates resources and demands for audit practice. Improvements in accuracy and efficiency may coexist with deskilling, increased cognitive demands, and challenges to professional judgment. These effects do not operate independently. They influence and potentially offset one another.

Key message: The ultimate impact of AI on auditing will depend not on any single effect, but on how its benefits and risks combine and evolve over time.

On June 17-18 the tenth FAR Annual Conference took place. Under the conference theme ‘The Organization of Innovation’, researchers and practitioners explored these questions from a wide range of perspectives.

Join us for the FAR Conference 2026 on 17–18 June

This two-day event brings together leading academics, practitioners, and regulators to explore the latest research and developments in auditing and assurance. With keynote speakers, panel discussions, and interactive sessions, the FAR Conference offers a unique opportunity to engage with cutting-edge insights and connect with peers from around the world.

The program brings together rigorous research and practical perspectives on key developments in auditing. You can visit the program page for more information.

Explore the full program