Purpose: In an effort to develop an audit quality (AQ) framework specific to the US audit market, the Public Company Accounting Oversight Board (PCAOB) recently issued a concept release proposing 28 audit quality indicators (AQIs) along three dimensions: audit professionals, audit process and audit results. Using AQIs initially proposed by the PCAOB, as well as AQIs suggested by prior literature, the authors solicit perceptions from junior-level (senior and staff) auditors to investigate the current state of practice along many of the AQIs relating to audit professionals and audit process. Design/methodology/approachIn the study, 78 junior-level auditors responded to the survey.

SUMMARY We investigate the effects of psychological safety and auditor knowledge on subordinates' willingness to share privately known, fraud-relevant information during brainstorming. We test a model illustrating how partner leadership affects subordinates' perceptions of psychological safety (P-S), which then affect brainstorming differentially depending on the level of subordinates' task knowledge. Participants watch a video of a simulated brainstorming session in which we manipulate P-S by altering how the partner communicates. In the more (less) P-S condition, the partner engenders a supportive (non-supportive), non-threatening (threatening) group dynamic and a style that encourages (discourages) idea sharing. We predict and find that less-knowledgeable auditors increase their willingness to share privately known, fraud-relevant information in a more P-S setting than in a less P-S setting; there is no effect of differential levels of P-S on more-knowledgeable auditors' changes in willingness to share such information. This implies the criticality of encouraging team dynamics that engender P-S for less-knowledgeable subordinates. Data Availability: Contact the authors.

This instructional case integrates multiple accounting concepts relating to fixed asset acquisition and subsequent measurement. You must apply accounting knowledge, professional judgment, and critical thinking skills to evaluate fixed assets and make recommendations. You must also analyze differences between fixed asset accounting under US generally accepted accounting principles and IFRS. As a student, you generally understand basic application of asset cost computation that simply recognizes the amount of cash paid for acquiring the asset. However, determining asset cost becomes challenging when you encounter more complex situations. You must consider initial measurement issues relating to a land purchase (demolition of existing building and a special assessment expenditure), interest capitalization for a self-constructed building, a nonmonetary asset exchange, and an asset retirement obligation. The case also considers subsequent measurement issues in terms of depreciation (straight-line and accelerated methods), replacement of an asset component, and impairment. The case structure is NOT THE PUBLISHED VERSION; this is the author's final, peer-reviewed manuscript.

SUMMARY Conducting a fraud brainstorming session during planning assists with risk-based tailoring of the audit. An effective session should include a team environment in which all members are willing to share information to appropriately calibrate the collective assessment of fraud risk. We report the results of a study (Gissel and Johnstone 2017) in which we manipulate partner leadership in terms of engendering a safe (unsafe) psychological environment whereby subordinates are (are not) encouraged to speak up about fraud-relevant information. Participants are audit staff and seniors, and through the experimental case (based on the Krispy Kreme Doughnut Corporation fraud) they come to realize that they alone possess fraud-relevant information critical to the team's calibration of fraud risk. These auditors participate in a simulated brainstorming session containing the partner leadership manipulation and indicate changes in their willingness to share the fraud-relevant information with the team. We find that less-knowledgeable auditors become more willing to share their privately known, fraud-relevant information when the partner engenders a safe psychological environment as compared to an unsafe environment. In contrast, more-knowledgeable auditors are impervious to the relative psychological safety engendered by the partner; these individuals are equally willing to speak up regardless of the partner's leadership behavior. Data Availability: Contact the authors.

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