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2016B05 – Professional skepticism profiles, effects on audit processes and outcomes, and the moderating role of audit firm culture
Project Number – 2016B05

2016B05 – Professional skepticism profiles, effects on audit processes and outcomes, and the moderating role of audit firm culture

What?

What?

This study focuses on a firm’s potential improvement of professional skepticism in the interplay between an auditor’s innate professional skepticism (personality trait), audit firm culture and audit quality by addressing three questions: How skeptical are auditors by nature in different ranks and experience levels? How does this professional skepticism affect the audit process auditors apply and the ultimate audit quality achieved? And how does firm and team culture affect professional skepticism in the audit?

Why?

This study will provide insights into what more skeptical auditors by nature do differently during the audit process and whether or not this leads to higher levels of audit quality (nature, timing, and extent of audit procedures) – and, through that, it will enable firms to strengthen firm culture in promoting professional skepticism (and more specifically how to provide the fruitful ground for less skeptical auditors by nature to perform a skeptical audit nevertheless). These insights are also highly relevant in relation to regulators (IFIAR, AFM, PCAOB) and standard setters (IAASB). Working paper

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Professional skepticism traits and fraud brainstorming quality
Auditing standards emphasize that fraud detection is an important objective of an audit and require the exercise of professional skepticism (PS) and a discussion among the engagement team to prevent and detect fraud. The purpose of this study is to examine whether professional skepticism is a driver of fraud brainstorming quality. We investigate the relationship between fraud brainstorming quality, using the measure of Brazel et al. (2010), and auditor’s professional skepticism traits. Using proprietary data from Dutch audit firms on 125 engagements, we find that neutral trait skepticism and professional moral courage of the partner have a significant effect on fraud brainstorming quality. We observe a higher attendance rate and contribution of specialists, more extensive discussion, longer preparation, and longer sessions for engagements led by partners with high neutral trait skepticism and high moral courage. We find no significant results for partners with a high presumptive doubt trait. Additional cross-sectional analyses show that the effect of professional skepticism on FBQ depends on situational, organizational conditions.
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Auditors’ Professional Skepticism: Traits, Behavioral Intentions, and Actions
This study examines what drives auditors’ professional skepticism, a critical factor for audit quality. Using data from 663 auditors across six Dutch firms, the research explores how individual differences (such as gender, experience, and knowledge) and personality traits (Big Five and Dark Triad) influence skepticism.
It also applies the Theory of Planned Behavior to link skepticism traits with attitudes, social norms, and perceived control, showing how these factors shape intentions and actual skeptical actions during audits.
Key findings reveal that social pressure (subjective norms) is the strongest predictor of skeptical behavior, and that traits like conscientiousness, openness, and narcissism are positively associated with skepticism, while psychopathy and high agreeableness reduce it.
The study offers practical insights for audit firms and regulators on fostering a culture that promotes skepticism and improving interventions to enhance audit quality.
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The ins and outs of professional skepticism – Summary in Dutch
This dissertation shows that auditors’ inherent skeptical traits, shaped by personality and individual differences, significantly influence audit quality. More skeptical auditors improve fraud brainstorming and are more likely to issue going-concern opinions for distressed clients. The findings highlight the importance of recruiting auditors with the right traits and fostering team norms and reward systems that encourage skepticism. This is a summary of the dissertation in Dutch.
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Professional Skepticism Traits and Fraud Brainstorming Quality
Auditing standards emphasize that fraud detection is an important objective of an audit and require the exercise of professional skepticism (PS) and a discussion among the engagement team to prevent and detect fraud. The purpose of this study is to examine whether professional skepticism is a driver of fraud brainstorming quality. We investigate the relationship between fraud brainstorming quality, using the measure of Brazel et al. (2010), and auditor’s professional skepticism traits. Using proprietary data from Dutch audit firms on 125 engagements, we find that neutral trait skepticism and professional moral courage of the partner have a significant effect on fraud brainstorming quality. We observe a higher attendance rate and contribution of specialists, more extensive discussion, longer preparation, and longer sessions for engagements led by partners with high neutral trait skepticism and high moral courage. We find no significant results for partners with a high presumptive doubt trait. Additional cross-sectional analyses show that the effect of professional skepticism on FBQ depends on situational, organizational conditions.  
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PhD Dissertation – The ins and outs of professional skepticism
The objective of an external audit is to provide assurance to the users of financial statements on the quality of the reported information. A quality audit is therefore essential for the functioning of capital markets. The exercise of professional skepticism is often described as a key attribute for a quality audit. However, despite its alleged importance, the concept of professional skepticism is not well understood. This dissertation advances our understanding of professional skepticism by investigating professional skepticism traits as input factors, and as drivers of process and output factors of the audit. Results of this dissertation show that professional skepticism traits of auditors are significantly affected by personality traits and other individual differences, and differ significantly across ranks. Further, it shows that professional skepticism ultimately affects audit quality as professional skepticism traits are significant drivers of certain audit process and output factors. The holistic approach used in this dissertation allows me to provide recommendations for practitioners to enhance the exercise of professional skepticism.  
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Project info

Project Lead

Dr. Kris Hardies

Research team

Dr. Sanne Janssen
Dr. Karla Zehms
Dr. Kris Hardies
Prof. dr. Ann Vanstraelen

Involved University

Maastricht University | University of Antwerp | University of Wisconsin

Theme(s)

Audit Outcomes, Communication, and Audit Quality Indicators | Professional Skepticism and Auditor Behavior
Project Number – 2016B05

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