Auditors' Evaluation of Evidence: The Effect of Communication Channel and Management Competence Information

Carlisle, Melissa; Jenkins, J. Gregory

doi:10.2139/ssrn.3105452

Cited by 6 publications

(4 citation statements)

References 27 publications

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“…Some studies demonstrate a benefit of email use. Specifically, Bennett and Hatfield (2013) find that staff auditors are more likely to request documentation from senior client personnel when allowed to use email, while Carlisle (2018) and Hawkins (2017) suggest that auditors are less likely to be persuaded by clients over email versus in person. However, other studies demonstrate negative effects of email use.…”

Section: Discussionmentioning

confidence: 99%

“…Overall, these findings suggest that even though staff auditors are more comfortable using email, firms should find ways to help staff gain more comfort with in-person inquiry in order to receive higher quality responses from clients. However, audit firms should also be cognizant of Carlisle's (2018) and Hawkins' (2017) findings that auditors might be more persuaded by clients in person. Of course, firms should stress the importance of applying professional skepticism to all client inquiry responses, regardless of communication mode.…”

Section: Discussionmentioning

confidence: 99%

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Email versus In-Person Audit Inquiry: Recent Research and Additional Survey Data

Saiewitz

2018

Current Issues in Auditing

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SUMMARY Recent research suggests that an auditor's choice to conduct audit inquiry via email versus in person can adversely impact both auditor and client behavior. In this study, I review recent research on this important topic, and I present additional survey-based evidence that describes how clients perceive auditor email versus in-person inquiries. I find that clients generally view auditors' in-person requests as more important and urgent than email requests, and clients feel they can more carefully craft their responses to support their company's preferred reporting position via email compared to in person. Further, clients expect that auditors will question an aggressive response more quickly in person than over email. Although audit partners have expressed concerns that email communication could impede auditor-client relationship building, I find no differences in how much clients like the auditor or in clients' willingness to work again with the auditor after receiving an email or in-person request. However, recent research suggests that email requests can lead to more negative feelings toward the auditor, which could affect the auditor-client relationship over time. I discuss implications for audit firms and provide suggestions for future research.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

Email versus In-Person Audit Inquiry: Recent Research and Additional Survey Data

Saiewitz

2018

Current Issues in Auditing

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“…On the other hand, the authors (Carlisle, 2018) and (Hawkins, 2017) suggest that remote auditing would in fact improve audit quality. The first author claims that an auditor will be more neutral in remote auditing as he/she will not be influenced by auditee management and will try to find their own source of information to confirm the claims given in financial reporting.…”

Section: Advantages and Disadvantages Of Remote Auditingmentioning

confidence: 99%

Internal Auditing in Covid-19 Environment: Is Remote Auditing a Solution?

Mizdraković¹,

Kljajić²,

Zekić³

2021

Proceedings of the 8th International Scientific Conference - FINIZ 2021

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The global pandemic caused by the new coronavirus COVID-19 disease flared up around the world and it was very difficult to predict. When it comes to the worldwide economy, there is no doubt that the pandemic will have serious consequences because, besides being a health crisis, pandemic has already turned into a great economic and financial crisis. This, in turn, left the management of service providing entities left with a dilemma -to choose the right model for their business activities and care for their employee's health at the same time. This paper discusses possible solutions related to internal audit, as a service providing profession. It also analyses advantages and disadvantages of internal auditing activities performed before and during the pandemic. The authors' findings lead to the conclusion that auditors could use this business environment as an opportunity for complete digital transformation since the function of internal audit can be further improved using new information and communication technologies.

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“…However, Carlisle (2015) finds that face-to-face communication leads auditors to rely on nonreliable characteristics of the client. This indicates that written communication, such as email, may facilitate the exercise of professional skepticism better than face-to-face communication because written communication does not cloud auditor judgments based on unrelated cues coming from the message sender observed face-to-face.…”

Section: Introductionmentioning

confidence: 99%

The joint impact of management expressed confidence and response timing on auditor professional skepticism in client email inquiries

Zimmerman¹

2016

MAJ

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Purpose While academic research has been conducted on auditors’ ability to exercise professional skepticism in face-to-face client interviews, little is known about auditors’ application of professional skepticism in email communication with the client. The purpose of this paper is to examine the factors that impact auditor professional skepticism during client inquiries conducted through email. Design/methodology/approach A 2 × 2 between-subjects experiment was conducted with 69 undergraduate and graduate auditing students as surrogates for auditors. The experimental design crossed two levels of client expressed confidence (high and low) and two levels of client response timing to the auditor’s email inquiry (earlier than expected and later than expected). Findings Results indicate that management expressed confidence moderates the influence of management response timing on auditor professional skepticism and that auditor perceptions of client credibility mediate this interactive effect. When the client’s response is low in confidence, auditors perceive a later-than-expected response from the manager as less credible than an earlier-than-expected response, which leads to less reliance on management explanations, which signifies more skepticism. However, when confidence is high, response timing does not impact perceptions of the client’s credibility. Practical implications The results imply that junior auditors should be vigilant of how communication cues in client emails may impact their judgments. Even though management response timing and expressed confidence should not influence auditor skepticism per se, auditors seem to vary their level of skepticism with the timing of the client’s response when client confidence is low but not when client confidence is high, despite the information content of the client’s response being held constant. Originality/value This study contributes to the literature on professional skepticism by addressing the Public Company Accounting Oversight Board’s concerns about the need for auditors to exercise more professional skepticism in practice, particularly in an environment in which computer-mediated communication is increasing at a fast pace; and assists practitioners in better understanding the factors that influence the degree of skepticism auditors exercise when collecting audit evidence through email. The study should be of interest to audit firms, as it provides evidence on whether auditors use nonverbal cues such as chronemics, or time-related messages, in email communication to judge management and evidence reliability and credibility.

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Auditors' Evaluation of Evidence: The Effect of Communication Channel and Management Competence Information

Cited by 6 publications

References 27 publications

Email versus In-Person Audit Inquiry: Recent Research and Additional Survey Data

Email versus In-Person Audit Inquiry: Recent Research and Additional Survey Data

Internal Auditing in Covid-19 Environment: Is Remote Auditing a Solution?

The joint impact of management expressed confidence and response timing on auditor professional skepticism in client email inquiries

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