Auditor Information Foraging Behavior

2016 ◽  
Vol 92 (4) ◽  
pp. 145-160 ◽  
Author(s):  
Benjamin P. Commerford ◽  
Richard C. Hatfield ◽  
Richard W. Houston ◽  
Curtis Mullis
Keyword(s):  
Foraging Behavior ◽  
Audit Quality ◽  
Information Value ◽  
Information Foraging ◽  
Personal Cost ◽  
Audit Evidence ◽  
Evidence Quality ◽  
Evidence Collection ◽  
Small Change ◽  
The Individual

ABSTRACT In this study, we examine how information foraging by auditors affects audit evidence collection in two distinct contexts, and show how a small change to audit methodology mitigates the potentially harmful effects of foraging. Information Foraging Theory explains how, while navigating an information environment, individuals learn to acquire information through personally experiencing the costs incurred and the values obtained from information. Consistent with the theory, we find that auditors react to the immediately felt costs of information collection (e.g., time and effort) at the expense of a more global consideration of information value (i.e., auditors collect lower-quality audit evidence). However, foraging behavior is moderated by removing the personal cost to the individual auditor (identifying audit evidence for another member of the audit team to collect), further demonstrating that these personally felt costs influence auditor choices in a way that reduces the quality of information collected. We contribute to the literature by demonstrating how information foraging can influence evidence quality and, thus, audit quality, and how a slight alteration of audit methodology can mitigate this behavior.

The Effect of Design Changes on Sound Transmission through a Building

1996 ◽  
Vol 3 (3) ◽  
pp. 145-185
Author(s):  
Robert J.M. Craik
Keyword(s):  
Young’S Modulus ◽  
Poisson’S Ratio ◽  
Young's Modulus ◽  
Sound Transmission ◽  
Poisson's Ratio ◽  
Analysis Model ◽  
Room Size ◽  
Design Changes ◽  
Small Change ◽  
The Individual

A statistical energy analysis model of a building was used to assess the effect of design changes on sound transmission. Systematic changes were made to the material properties (density, Young's modulus, Poisson's ratio and internal loss factor) and to the dimensions (thickness and room size). These changes resulted in a redistribution of the energy throughout the building causing the noise level to go up in some rooms and to go down in others. For each case examined it was found that the effect of several changes could be estimated from the sum of the individual changes. Thus a change of 20% in the density resulted in approximately double the change in DnTw that was obtained from a 10% change in density. The same additive effect was also found to apply if more than one variable was changed at the same time. Thus the change in DnTw resulting from a small change in Young's modulus for the floors and a small change in the density of the walls can be estimated from the sum of the two individual effects. Changes to the thickness and density of the walls and floors have the greatest effect on sound transmission whilst changes to Young's modulus and Poisson's ratio have a much smaller effect. Damping can also have a significant effect on transmission particularly far from the source.

The effect of engagement partner workload on audit quality

2021 ◽  
Vol 36 (8) ◽  
pp. 1068-1091
Author(s):  
Yun Cheng ◽  
Christine M. Haynes ◽  
Michael D. Yu
Keyword(s):  
Audit Quality ◽  
Firm Level ◽  
Content Type ◽  
Big 4 ◽  
The Us ◽  
Performance Benchmarks ◽  
Partner Characteristics ◽  
Partner Firm ◽  
The Individual ◽  
The Relationship

Purpose Auditing studies have shifted the research focus from the audit firm level to the individual audit partner level in recent years. Motivated by the call from Lennox and Wu (2018) to explore the effect of audit partners’ characteristics on audit quality in the US, this study aims to develop a new measure of engagement partner workload (EPW), which includes both the size and number of clients audited to test the effect of EPW on audit quality. This study also examines the moderating effect of the partner firm size on audit quality. Design/methodology/approach To test the effect of the EPW on audit quality, this study runs multivariate regressions of EPW on each specific client’s discretionary accruals and audit report delays. This study also runs a logistic regression of EPW on clients’ probability of having small profit increases to meet performance benchmarks. Findings Results of the hypotheses show that partner workload is positively related to audit quality. The results indicate that partners with larger, but fewer, clients conduct higher quality audits. Further analysis indicates that the relationship between partner workload and audit quality only holds for partners from the non-Big 4 firms. Originality/value This study contributes to the literatures of both audit quality and audit partner characteristics, and the results complement initial research aimed at identifying US partner-related characteristics that influence audit quality.

scholarly journals Using Audit Programs to Improve Auditor Evidence Collection

2020 ◽  
pp. 0000-0000
Author(s):  
Jacqueline S Hammersley ◽  
Michael A Ricci
Keyword(s):  
Audit Quality ◽  
Task Goal ◽  
Relevant Evidence ◽  
New Information ◽  
Evidence Collection ◽  
Program Creation ◽  
Audit Program ◽  
Experience Difficulty

Auditors experience difficulty auditing accounts on which it is difficult to identify in advance all the evidence necessary to perform an effective audit. These accounts are challenging because they commonly require auditors to collect additional, relevant evidence in response to new information received during evidence collection. We address this experimentally by examining whether changing the focus of audit programs from plan-focused (i.e., focused on the planned audit procedures) to goal-focused (i.e., focused on the task goal) improves auditors' collection of relevant evidence that is not identifiable at audit program creation. We expect goal-focused auditors to remain open to more ways to achieve their goal. Consequently, we expect and find that goal-focused auditors collect more effective evidence than plan-focused auditors and follow-up more effectively on this evidence. This suggests that a goal-focused approach improves audit quality on tasks requiring auditors to flexibly respond to new information.

Does Audit Fee Homogeneity Exist? Premiums and Discounts Attributable to Individual Partners

2011 ◽  
Vol 30 (4) ◽  
pp. 249-272 ◽  
Author(s):  
Stuart D. Taylor
Keyword(s):  
Audit Quality ◽  
Audit Fees ◽  
Data Availability ◽  
Audit Market ◽  
Homogeneity Assumption ◽  
Audit Firms ◽  
Audit Fee ◽  
Using Data ◽  
The Individual ◽  
Made In

SUMMARY This paper investigates the implied assumption, made in many audit fee determination studies, that, within a given audit firm, all partners produce a statistically identical level of audit quality and earn a statistically identical level of audit fees. This is referred to as the “homogeneity assumption.” However, this is contradicted by the individual auditor behavioral literature, which shows that different individual auditor characteristics can have an impact on audit quality. Given the fact that audit partners differ in their quality, this paper hypothesizes that different audit partners will be able to earn differing levels of fees. This hypothesis is tested by estimating an audit fee model using data from 822 Australian publicly listed companies for the year 2005. Australia is an ideal audit market for this research, as the disclosure of the name of the audit engagement partner in the audit report is mandatory. The empirical results indicate that individual audit partners earn individual audit fee premiums (or discounts) that are not explainable by the audit firms of which they are members. Data Availability: All data have been extracted from publicly available sources.

scholarly journals The Influence of Audit Staff Quality and Client Type on Audit Evidence Collection with Communication Type as Moderation

2020 ◽  
Vol 3 (1) ◽  
pp. 103-117
Author(s):  
Syamsuri Rahim ◽  
Hamzah Ahmad ◽  
Nurwakia Nurwakia ◽  
Nurfadila Nurfadila ◽  
Muslim Muslim
Keyword(s):  
Hypothesis Test ◽  
Sampling Technique ◽  
Test Results ◽  
Accounting Firm ◽  
Audit Evidence ◽  
Evidence Collection ◽  
Study Population ◽  
The Relationship ◽  
Positive Effect ◽  
Public Accountant

This study aims to examine the effect of audit staff quality (staff in-charge or auditors who carry out audit tasks) and the client type on the audit evidence collection is moderated by the communication type. The study population was auditors working in the Makassar Public Accounting Firm. The sampling technique used was purposive sampling, while the data collection was done by distributing questionnaires to all auditors who met the sample criteria. The samples are thirty-three auditors from seven public accountant office in Makassar city. The hypothesis test was conducted using Smart PLS 3. This study found that the audit staff quality, client type, and communication type had a positive effect on the collection of audit evidence directly. Furthermore, the moderation test results found that the communication type strengthens the relationship between the client type and the collection of audit evidence. It means that while gathering audit evidence, the higher the audit staff quality, the more evidence they can obtain. The same result also found in the relationship between the client type and the audit evidence collection. When the client type is friendly, the more audit evidence is gathered. Based on these results, it is suggested that junior auditor must build their confidence in dealing with the clients.

scholarly journals The measurement of audit quality in the Netherlands: a practical note

2021 ◽  
Vol 95 (1/2) ◽  
pp. 17-31 ◽  
Author(s):  
Tjibbe Bosman
Keyword(s):  
The Netherlands ◽  
Quality Indicators ◽  
Audit Quality ◽  
Quality Measures ◽  
Information Value ◽  
Quality Data ◽  
Wide Range ◽  
Different Types

Several committees, institutions, and practitioners are currently working on defining appropriate, and reliable Audit Quality Indicators (AQIs). The experiences the Foundation for Auditing Research (FAR) made with collecting audit quality data may inform the search for appropriate and reliable AQIs. In this paper I discuss different types of audit (quality) measures and their availability in the Netherlands. Furthermore, I discuss the (potential) information value, limitations, and recommendations for a wide range of audit quality measures and sources.

Understanding Sense-Making on Social Media During Crises

2017 ◽  
Vol 9 (4) ◽  
pp. 49-69 ◽  
Author(s):  
Stefan Stieglitz ◽  
Milad Mirbabaie ◽  
Jennifer Fromm
Keyword(s):  
Social Media ◽  
Content Analysis ◽  
Information Dissemination ◽  
Qualitative Content Analysis ◽  
Negative Emotions ◽  
Information Value ◽  
Sense Making ◽  
The Individual ◽  
Biased Reporting ◽  
Crisis Situations

Individuals are increasingly using social media during crisis situations to seek information. However, little is known about how they utilize social media to gain an understanding of crisis situations. The aim of this study was to close this gap by conducting sense-making interviews with 18 German social media users. A qualitative content analysis revealed the following sense-making barriers: low information value, negative emotions, biased reporting, taking advantage, volume of information, limited knowledge, speed of information dissemination, and technical barriers. Furthermore, users applied the individual sense-making strategies of searching, selecting, verifying, enriching, interpreting, and sorting, as well as the collective strategies of distributing, communicating, and reporting. This article contributes to research by providing categorizations of sense-making barriers and strategies in the context of crisis situations. Furthermore, suggestions are made for how emergency agencies could utilize social media for crisis and continuity management.

Female audit partners and accruals quality: evidence from Indonesia

2020 ◽  
Vol 10 (2) ◽  
pp. 305-319
Author(s):  
Gatot Soepriyanto ◽  
Pamela Krisky ◽  
Yanto Indra ◽  
Arfian Zudana
Keyword(s):  
Audit Quality ◽  
Positive Impact ◽  
Risk Tolerance ◽  
Alternative Measure ◽  
Audit Process ◽  
Content Type ◽  
Accruals Quality ◽  
Abnormal Accruals ◽  
The Individual ◽  
Audit Reports

PurposeThis study examines the association between accruals quality and gender of the firm's audit engagement partner in Indonesia. Specifically, prior studies provide evidence that gender-based difference in diligence, conservatism and risk tolerance, it is plausible that female auditors may improve audit quality. Indonesia provides a valuable research setting to investigate the issue, as it is mandatory to disclose the identity of the audit partners in the audit reports.Design/methodology/approachThis study employs multivariate regression model to test the hypothesis, which examines the association between accruals quality and audit partners gender. Using a sample of Indonesian publicly listed firms, we run a panel of regression of audit quality measure proxied by abnormal accruals on female auditor variable and firm-specific controls. To triangulate the results, we also conduct sensitivity analysis using high and low category of abnormal accruals, an alternative measure of accruals quality (i.e. Beneish's M score) and propensity score matching (PSM).FindingsWe find that firms with female audit engagement partners are not associated with smaller abnormal accruals, thereby implying that female auditors may not constrain effects on earnings management. In other words, gender is not an important predictor for audit quality in Indonesia.Research limitations/implicationsWe are not able to use broader measures of audit quality such as GAAP violations/restatement, litigation or audit fee. This is because the Indonesian setting somewhat limits us to collect them due to lack of regulatory actions and/or database availability.Practical implicationsThis study will contribute to the regulators (such as Financial Service Authorities/OJK) and professionals, on the effectiveness of female audit partners in improving audit quality. The study can be used as an evidence to support the gender equality in the accounting and audit industry.Social implicationsOur findings suggest that auditor gender does not lead to the improvement of accruals quality in Indonesia. Given the fact that only 14% of firms in our sample audited by female audit partners, it is plausible that the positive traits of female top managers may not transmit to the overall audit process. As such, it is important to encourage more female involvement in top position of auditing and accounting industry is required to advance the profession and its positive impact to the society.Originality/valueThere are no prior studies in Indonesia examining the effect of audit partner gender on accruals quality using archival data. As such, this research will be the first to document such evidence and therefore can improve our understanding on the role of auditor characteristic on audit quality. We also respond to the call from DeFond and Zhang (2014) to push analysis of audit quality to the individual auditor level by examining the gender of audit partner.

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