It’s Not Only What You Say…. How Communication Style and Team Culture Affect Audit Issue Follow-Up and Auditor Performance Evaluations

2021 ◽  
Author(s):  
Chad Proell ◽  
Youpin Zhou ◽  
Mark W. Nelson
Keyword(s):  
Audit Quality ◽  
Performance Evaluations ◽  
Communication Style ◽  
Quality Improvements ◽  
Upward Communication ◽  
Team Culture ◽  
Style Preferences ◽  
Audit Team ◽  
Speak Up

Auditors work in hierarchical teams in which effective upward communication is critical to audit quality. We provide evidence that audit seniors’ willingness to consider following up on information, as well as their evaluations of staff performance, are affected by how audit staff speak up (i.e., their communication style) and audit team culture. Namely, audit seniors consider follow-up procedures more and rate staff higher when staff assertively communicate issues, especially in more autonomous team cultures. Yet, audit staff prefer to use a more passive communication style and perceive a more assertive upward communication style as risky, suggesting a disconnect between audit seniors and their staff. Our results suggest the potential for audit quality improvements by better alignment of supervisor-subordinate communication-style preferences, especially in more autonomous team cultures.

Is Silence Golden? Audit Team Leader Reactions to Subordinates Who Speak Up “In the Moment” and at Performance Appraisal

2018 ◽  
Vol 93 (6) ◽  
pp. 281-300 ◽  
Author(s):  
Mark W. Nelson ◽  
Chad A. Proell
Keyword(s):  
Performance Appraisal ◽  
Evaluation Studies ◽  
Team Leader ◽  
Data Availability ◽  
Performance Evaluations ◽  
Team Leaders ◽  
Speaking Up ◽  
Or Efficiency ◽  
Audit Team ◽  
Speak Up

ABSTRACT This paper examines audit team leader reactions to auditors who speak up about potentially important audit issues. Study 1 is a survey of interacting audit teams and provides evidence of higher performance evaluations for auditors who speak up. Studies 2, 3, and 4 are experiments examining team leader reactions to speaking up, both at the time speaking up occurs (Study 2) and later, during performance evaluation (Studies 2, 3, and 4). Results provide evidence that team leaders react with irritation at the time speaking up occurs, particularly if a team member raises an audit effectiveness issue that could increase audit effort. However, team leaders reward speaking up in performance evaluations, particularly when team members speak up about issues that align with the effectiveness or efficiency focus of the team. While supervisors' performance evaluations exhibit outcome effects, supervisors also reward speaking up, regardless of outcome. Data Availability: Contact the authors.

The Association between Audit Manager and Auditor-In-Charge Experience, Effort, and Risk Responsiveness

2018 ◽  
Vol 38 (3) ◽  
pp. 121-147 ◽  
Author(s):  
Christine Contessotto ◽  
W. Robert Knechel ◽  
Robyn A. Moroney
Keyword(s):  
Audit Quality ◽  
Data Availability ◽  
The Core ◽  
Specific Experience ◽  
Primary Core ◽  
Using Data ◽  
Audit Team ◽  
Industry Experience ◽  
Jel Classifications ◽  
Core Role

SUMMARY Audit quality is dependent on the experience and effort of the audit team to identify and respond to client risks (risk responsiveness). Central to each team are the core role holders who plan and execute the audit. While many studies treat the partner as the primary core role holder, the manager and auditor-in-charge (AIC) are also important. Using data for engagements from two midtier firms, we analyze the association between the experience and relative effort of the manager and AIC and risk responsiveness. We find a manager's client-specific experience is associated with risk responsiveness for non-listed clients but find no evidence that the general or industry experience of a manager, or the experience of the AIC, is associated with risk responsiveness. The client-specific experience and relative effort of the partner is associated with risk responsiveness. These results suggests that managers can provide an important, albeit limited, contribution to the audit. JEL Classifications: M2. Data Availability: The data were made available to the researchers on the understanding that they will remain confidential.

scholarly journals A failed review of CCE site inspection standards and processes

2019 ◽  
Vol 27 (1) ◽  
Author(s):  
Stanley I. Innes ◽  
Charlotte Leboeuf-Yde ◽  
Bruce F. Walker
Keyword(s):  
Educational Research ◽  
Quality Standards ◽  
Educational Programs ◽  
Quality Improvements ◽  
High Quality ◽  
Accreditation Standards ◽  
Chiropractic Education ◽  
Chiropractic Practice ◽  
Similarities And Differences

Abstract Background Accreditation of educational programs involves an independent agency assessing quality against a set of defined standards. Site inspection teams are appointed by an accrediting agency and compile a report with the intention of identifying deficiencies and making recommendations for their rectification and continued improvement. For chiropractic programs accreditation is carried out by Councils on Chiropractic Education (CCEs). However, the reliability of their site inspection teams remains unknown. Recent research has suggested that variability in chiropractic practice may be partially traced back to the education provider. This raises the possibility of deficient accreditation procedures that may include unsatisfactory site inspection standards or processes or the accreditation standards by which they work to. We sought to compare the various CCEs documented standards and processes for site inspection teams for similarities and differences with the intent of making recommendations to create uniform and high quality standards. Further, we sought to compare a sample of CCEs site inspection team surveys / reports for commonly identified recommendations and quality improvements and determine if they are adequately described in their accreditation standards. Method In December of 2018 invitation emails were sent to 4 CCEs through their website portals outlining a proposed study investigating site inspection teams’ standards and processes. Access was requested to all appropriately redacted documentation relating to site inspection teams and their chiropractic program reports. Follow up emails were sent several weeks later. Results Only one of four of the CCEs responded by providing the requested information. Conclusion and recommendations Three CCEs did not cooperate with this educational research. The possible reasons for the non-engagement is discussed.

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.

Uncovering Russian communication style preferences: Monological sequencing versus dialogical engagement

2020 ◽  
Vol 11 (1) ◽  
pp. 43-59
Author(s):  
Elena Fell
Keyword(s):  
Cross Cultural ◽  
Communication Style ◽  
Cultural Communication ◽  
The West ◽  
Communication Failure ◽  
Cultural Setting ◽  
Cross Cultural Communication ◽  
Communication Problems ◽  
Communication Situations ◽  
Style Preferences

When we communicate with others, we usually know when we are expected to contribute to an evolving dialogue, such as during a debate, or when it is suitable to generate predictable responses, for example, at a marriage ceremony. However, in cross-cultural communication situations, communicating partners may have different assumptions in this respect. In particular, when a western communicator expects a dialogical development, a Russian participant may expect the same communication situation to progress as a sequence of predictable communication acts. This clash of implicit expectations often results in communication failure, without either party realizing that implementing incompatible approaches to information sharing is the reason for this failure. In this article, I introduce the terms ‘dialogical engagement’ and ‘monological sequencing’ whilst exploring cross-cultural communication problems between Russia and the West. I use these terms to describe mechanisms that characterize both cultures’ preferred communication patterns and which, when inadvertently deployed, cause collisions between Russian and western communicating partners. By uncovering these differences, I intend to progress beyond merely acknowledging cross-cultural communication problems between the two worlds. Besides, as in the Russian cultural setting, more communication situations are implicitly expected to develop as monological sequences than similar situations in the West, understanding this particular distinction may prevent practitioners in numerous fields from making the mistake of expecting cross-cultural communication situations to develop in line with their implicit assumptions.

Japanese cancer patients' communication style preferences when receiving bad news

2007 ◽  
Vol 16 (7) ◽  
pp. 617-625 ◽  
Author(s):  
Maiko Fujimori ◽  
Patricia A. Parker ◽  
Tatsuo Akechi ◽  
Yuji Sakano ◽  
Walter F. Baile ◽  
...  
Keyword(s):  
Cancer Patients ◽  
Bad News ◽  
Communication Style ◽  
Style Preferences

The role of audit quality in firm valuation

2016 ◽  
Vol 58 (5) ◽  
pp. 575-598 ◽  
Author(s):  
Mishari M. Alfraih
Keyword(s):  
Audit Quality ◽  
Value Relevance ◽  
Accounting Information ◽  
Institutional Setting ◽  
Content Type ◽  
Book Value ◽  
Big 4 ◽  
Audit Firms ◽  
Audit Team

Purpose The purpose of this paper is to examine the effect of audit quality on the value relevance of earnings and book value. Because joint audit is mandated for all Kuwait Stock Exchange-listed firms, it is hypothesized that the higher the quality of the audit team (as measured by the number of Big 4 audit firms in the joint audit team), the higher the value relevance of earnings and book values for equity valuation. Design/methodology/approach Consistent with prior research, the value relevance of earnings and book value is measured by the adjusted R2 derived from the Ohlson’s 1995 regression model. The number of Big 4 audit firms represented on the firm’s audit team is used as a proxy for audit quality. Three tiers of audit quality exist, namely, two non-Big 4 audit firms, one Big 4 and one non-Big 4 audit firms or two Big 4 audit firms. To address this paper’s objective, the association between audit quality and the value relevance of earnings and book value were examined using four approaches. The final sample consists of 1,836 firm-year observations and covers fiscal years from a 12-year period (2002-2013). Findings Taken together, the four approaches used collectively provide empirical evidence that audit quality positively and significantly affects the value relevance of accounting measures to market participants. Importantly, the results reveal significant variations in the value relevance of earnings and book value jointly across the three possible auditor combinations. Research limitations/implications Although using auditor size as a proxy for audit quality is well established in the auditing literature, a limitation of that proxy is that it measures audit quality dichotomously, which implicitly assumes a homogeneous level of audit quality within each group. Practical implications The findings show the importance of high-quality and rigorous external audits in improving the value relevance of accounting information. Originality/value This study contributes to the extent literature on audit quality by exploring the role of audit quality in a unique institutional setting that imposes mandatory joint audits. Although prior studies have investigated the effect of joint audit pair choice on earnings management and audit fee premium, this study is the first to investigate the effect of joint audit pair choice on the value relevance of accounting information.

scholarly journals Does Engagement Partners’ Effort Affect Audit Quality? With a Focus on the Effects of Internal Control System

Risks ◽  
2021 ◽  
Vol 9 (12) ◽  
pp. 225
Author(s):  
Suyon Kim
Keyword(s):  
Internal Control ◽  
Audit Quality ◽  
Vital Role ◽  
Fiscal Year ◽  
Audit Process ◽  
Client Characteristics ◽  
Audit Firms ◽  
Audit Reports ◽  
It Departments ◽  
Audit Team

An audit team includes engagement partners, CPAs, and staff. Among them, partners play a vital role in performing tasks that require expertise and experience, such as analyzing and understanding the industry, and supervising the overall audit process. In detail, the partners establish an audit plan, determine the overall audit time, provide the audit input ratio of the engagement team, and review the audit reports. This study examines for association between the partner’s audit hour ratio and audit quality depending on the client firms’ characteristics. Although the role of partners is important, the information about partner audit hours is limited. However, the Korean government requires audit firms to disclose the partner hour information in the audit report starting in the 2014 fiscal year. By the disclosure, it is possible to examine the association between partner audit hours and audit quality. In this study, the information on partner audit hour is hand-collected from the firms’ business reports. Using 6340 observations from 2014 to 2017, the partner audit hour ratio is associated with audit quality, under the characteristics of client firms. Firms’ risks are adopted for client characteristics, and we focused on the operation of internal control. The internal control operation level is measured by the following: (1) the ratio of internal control personnel and (2) experience of the internal control personnel in the accounting and IT departments. The result suggests that for the firms where internal control is not effectively operated, partners make more effort to enhance audit quality.

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