Does an Audit Office’s Quality Control System Impact Audit Quality? Evidence from Audit Report Errors

Abbott, Lawrence J.; Buslepp, William L.; Marquardt, Blair B.; Merrell, Stephanie Ann

doi:10.2139/ssrn.3704040

Cited by 3 publications

(2 citation statements)

References 48 publications

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“…These studies provide examples of how comment letter data can be useful for a variety of research questions. Acito et al (2019) use company response letters to better understand management's judgment in materiality decisions, Abbott et al (2020) use SEC comments on auditor opinions to identify quality control failures at the audit firm, and Hope et al (2017) use univariate comment letter data to rule out an alternative explanation for their main tests related to short selling and audit risk. Finally, Kuang et al (2020), Laurion et al (2017), and Lee et al (2019) use audit partner names copied on company response letters as a way of identifying audit partners prior to the audit participant disclosure required by the PCAOB in Form AP.…”

Section: Summary Of Prior Literature Following the Sec Filing Review ...mentioning

confidence: 99%

The SEC Filing Review Process: A Survey and Future Research Opportunities*

Cunningham

Leidner

2022

Contemporary Accting Res

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As part of its goal to monitor and enhance the quality of information available to investors, the SEC reviews companies' filings to ensure compliance with applicable financial reporting and disclosure requirements. Increased public interest and the substantial costs for both the SEC in reviewing and the companies in responding have led to a rapidly growing body of accounting literature that examines the filing review process. We survey and comment on 80 published and unpublished academic research papers in this literature and identify significant gaps that future research should address. We also summarize the institutional features of the filing review process, aiming to inform future academic studies. Our survey should be of interest to both academics and market participants evaluating the effectiveness and efficiency of the filing review process.

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Section: Summary Of Prior Literature Following the Sec Filing Review ...mentioning

confidence: 99%

The SEC Filing Review Process: A Survey and Future Research Opportunities*

Cunningham

Leidner

2022

Contemporary Accting Res

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“…Audit firms may thus continuously assess and monitor quality control systems with a view to updating firm policies and procedures, going beyond individual auditors' responses to errors, which have been the focus of the present paper. This process may remediate recent findings that audit firms' quality control mechanisms affect the audit quality provided by the firms (Abbott et al 2020). RCAs will be required from December 2022 by ISQM 1 (IAASB 2020) and have received extensive attention from regulators around the world (AFM 2020;FRC 2016;PCAOB 2017).…”

Section: Discussionmentioning

confidence: 85%

Walking the Talk? Managing Errors in the Audit Profession*

Gold

Detzen

Mourik³

et al. 2022

Contemporary Accting Res

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Errors reflect unintended deviations from plans or goals and commonly carry negative connotations. Although errors cannot be eliminated, they offer opportunities for learning and innovation. Audit firms employ powerful mechanisms, such as review processes, to prevent or detect audit errors and safeguard their work in the public interest. At the same time, the profession recognizes positive longterm outcomes of errors in terms of continuous learning to enhance auditor skills and, ultimately, audit quality. The current study employs semistructured interviews with Dutch auditors to investigate how they manage the tensions emanating from extant public and regulatory demands for flawless audits while embracing errors as opportunities for learning. Our findings reveal that auditors express a positive attitude toward openly communicating audit errors, but, in substance, they espouse negative emotions and defensive strategies for fear of repercussions. We argue that the excessive emphasis audit firms and oversight bodies place on error prevention conditions auditors into perceiving errors as negative and avoidable events. We assert these attitudes result from the profession's efforts to maintain status and legitimacy in the eyes of the public and the regulator, where any auditor error may shed doubt on auditors' work in the public interest. In sum, our findings indicate that viewing errors as incompatible with audit work makes the profession susceptible not only to repeating errors but also to missing out on opportunities to improve services and to achieve innovation.

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The SEC Filing Review Process: Insights from Accounting Research

Cunningham

Leidner

2019

SSRN Journal

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Does an Audit Office’s Quality Control System Impact Audit Quality? Evidence from Audit Report Errors

Cited by 3 publications

References 48 publications

The SEC Filing Review Process: A Survey and Future Research Opportunities*

The SEC Filing Review Process: A Survey and Future Research Opportunities*

Walking the Talk? Managing Errors in the Audit Profession*

The SEC Filing Review Process: Insights from Accounting Research

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