This paper synthesizes research on audit firm culture (AFC) over the past decade, reviewing recent developments in research on factors instilling culture in audit firms, and how culture influences audit quality and auditors' work attitudes. We develop and apply a three-phase model based on prior research and professional guidance (IAASB, 2014), which maps cultural embedding mechanisms (EMs, visible manifestations and organizational conditions to establish culture), perceptions of existing culture, and consequences of culture. Our synthesis shows that the culture of an audit firm is most oriented toward quality if leadership emphasizes professionalism over commercialism, promotes ethical judgments, and facilitates learning through systems, integration of specialists, and interpersonal interactions among auditors. The research cited shows strong influence on AFC of tone at the top set by leadership, as well as incentives in performance/reward systems. Studies we review generally imply continued concern for the influence of commercialism on AFC, but future research should investigate whether recent forces (i.e. pressure from regulators and efforts by the firms) have caused a cultural shift toward professionalism. We close by suggesting opportunities for future research that can strengthen understanding how AFC can be better managed by firms.
This teaching case provides an approach for educators to impart knowledge about both the data cleaning process and critical electronic spreadsheet functionalities that are used by auditors to students as part of the auditing curriculum. The cleaning of large data sets has become a vital task that is routinely performed by the most junior audit professional on the team. In this case, students learn how to cleanse a dataset and verify the completeness and accuracy of the dataset in accordance with relevant auditing standards. Importantly, all steps are completed on an author-created database within an electronic spreadsheet platform. The response from students has been strong. After completing the case assignment, a total of 81 auditing students at two private universities provided feedback. The results of the questionnaire reveal that students largely agree that the key learning objectives were achieved, validating the use of this case in the auditing curriculum.
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