FAR Online Masterclass report ‘The Impact of Auditor Interactions on Audit Quality’

On June 5 2020, Eddy Cardinaels and Kristof Stouthuysen presented an online masterclass concerning their study ‘The Impact of Auditor Interactions on Audit Quality’. This report provides a summary of the masterclass, including preliminary findings from the experiment they conducted. The study, so far, shows that:

• Concerning imitation, junior auditors imitate a more diligent superior more than a lower diligent superior. This effect is even more pronounced under a superior-based promotion system (as opposed to consensus-based promotion system).
• Regarding audit quality, junior auditors perform better when facing a diligent superior.

Furthermore, (self-reported) imitation does not improve audit quality. In particular, when facing a low diligent auditor, audit quality deteriorates. Hence, there seems to be a possibility to imitate a superior too much, particularly in the low diligent situation.