Toward an Understanding of Audit Team Distribution and Performance Quality

Downey, Denise; Obermire, Kara M.; Zehms, Karla M.

doi:10.2308/ajpt-18-147

Cited by 22 publications

(18 citation statements)

References 76 publications

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“…These observations are consistent with the management literature, which generally finds that communication issues cause distributed teams to underperform co-located teams (e.g., Hinds & Bailey, 2003;Hinds & Mortensen, 2005;Marlow et al, 2018). They are also consistent with audit research, which finds that distributed teams communication problems can affect actual and perceived audit quality (Downey, 2018;Downey et al, 2020;Downey & Bedard, 2019).…”

Section: Processsupporting

confidence: 87%

“…Downey et al (2020) and the present study in the context of the Input‐Process‐Output model. This figure uses the Input‐Process‐Output model to contextualize a foundational distributed teams paper, Downey et al (2020), and the present study.…”

Section: Introductionmentioning

confidence: 69%

“…First, both the PCAOB and IAASB are focused on the implications of distributed teams for audit quality (IAASB, 2017; PCAOB, 2017a). This attention seems warranted because the management and audit literatures have found that distributed teams are less effective than co‐located ones (e.g., Downey et al, 2020; Hinds & Mortensen, 2005). While general communication weaknesses are commonly recognized as key drivers of performance differences, we provide regulators with insight about a specific distributed team behavior : upward communication.…”

Section: Introductionmentioning

confidence: 99%

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How workplace identities and team management practices affect distributed team auditors' willingness to speak up

Proell,

Ricci,

Trotman

et al. 2023

Contemporary Accting Res

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Distributed, rather than co‐located, teams increasingly perform audit work, raising regulator concerns that distributed team communication issues may affect audit quality. We investigate upward communication (i.e., raising issues to supervisors), a key communication dimension related to audit quality (PCAOB, 2010). In Study 1 we survey 69 senior auditors to establish that distributed team upward communication suffers. Further, distributed team auditors identify less with their teams and struggle to know when and how to speak up. Because both are linked to inhibited upward communication, we next experimentally test firm practices with the potential to attenuate these problems. Study 2, an experiment with 128 staff auditors and interns, reveals that making auditors' professional identities salient improves upward communication on co‐located teams with strong team identities but not on distributed teams with weak team identities. Study 3, an experiment with 58 staff auditors, replicates a key Study 2 finding with a design that makes no reference to team identity strength. Specifically, in the presence of a salient professional identity, upward communication is significantly higher for co‐located relative to distributed team auditors. Study 4, an experiment with 69 staff auditors, focuses solely on distributed teams. It indicates that several distributed team management practices, including one‐on‐one and standing daily meetings, encourage upward communication. Finally, Study 5, informal interviews with eight audit seniors, corroborates key survey and experimental findings. Combined, our results provide insights into why distributed team communication suffers, refine audit voice theory, and provide regulators, practitioners, and researchers with multiple paths to improve audit quality.This article is protected by copyright. All rights reserved.

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Section: Processsupporting

confidence: 87%

Section: Introductionmentioning

confidence: 69%

Section: Introductionmentioning

confidence: 99%

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How workplace identities and team management practices affect distributed team auditors' willingness to speak up

Proell,

Ricci,

Trotman

et al. 2023

Contemporary Accting Res

View full text Add to dashboard Cite

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“…Future research could also use experiential surveys (cf. Downey et al, 2020) to assess auditors' perceptions of their own autonomy and proactivity when working on remote or in-person teams. In doing so, it is likely important to disentangle personal autonomy (e.g., freedom to take a break and exercise) from work autonomy (e.g., freedom to decide how a workpaper is structured).…”

Section: Discussionmentioning

confidence: 99%

Promoting proactive auditing behaviors

Peecher,

Ricci,

Zhou

2023

Contemporary Accting Res

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In this paper, we introduce the construct of proactive auditing behaviors to the accounting literature and report the first experimental investigation of their antecedents. Regulators and practitioners agree that proactive behaviors are needed to consistently achieve high‐quality audit outcomes, but also that these behaviors are scarce. Drawing on theory from management, accounting, and psychology, we predict that an environmental factor (autonomy) and a dispositional factor (tacit knowledge) interact to increase a range of distinct proactive auditing behaviors. These behaviors involve responding to evidence that has out‐of‐task implications, coordinating with clients to acquire task‐related evidence, and two forms of coaching junior auditors. As predicted, we find that auditors are more proactive when they have both higher autonomy and higher tacit knowledge than when they lack either or both factors. Our theory and findings inform academics, regulators, and practitioners about the types of work environments and policies that can promote auditor proactivity successfully.

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“…Research, however, suggests that the involvement of a component auditor be recognised as an additional criterion that may be indicative of complexity (and unique to a group setting) (Burke et al, 2020;Carson et al, 2021). Complexity in group audits may arise from coordination and communication challenges between group and component auditors (Downey & Bedard, 2019;Downey & Westermann, 2021) and cross-cultural differences and language barriers between group and component auditors (Downey et al, 2020;Saiewitz & Wang, 2020). We believe that the relevant requirements relating to group audits should be presented within each relevant part.…”

Section: Question 22mentioning

confidence: 99%

Comments of the AFAANZ auditing and assurance standards committee on proposed international standard on auditing ISA for LCE

Coram

Garg

et al. 2022

Accounting & Finance

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| 4221 3. We believe that the authority may lead to confusion as to the applicability of the standard in that it will likely contribute to a disconnect between what is perceived to be a less complex entity and entities scoped into the standard. We recommend that the IAASB consider placing less emphasis on global prohibitions and place more emphasis on qualitative characteristics and jurisdictional discretion. (Question 3b) 4. We do not believe that the authority itself informs audit report users of the scope of the proposed standard and recommend that this be addressed by other means (e.g., education). (Question 3d) 5. We believe that the role of legislative and regulative authorities is appropriate. (Question 3e) 6. We do not agree with the use of specific prohibitions and believe that greater emphasis should be placed on jurisdictional discretion, and a greater focus be placed on principlesbased qualitative criteria. (Question 4a) 7. We broadly agree with the qualitative characteristics specified, but recommend, following comments in response to other questions, that the criteria be expanded to include circumstances for which the auditor needs to refer to the full suite of standards and the need to use a component auditor. (Question 4b) 8. We suggest that the approach employed in developing the ED-ISA for LCE is problematic in that it is based on the material contained in the extant suite of standards. This approach gives rise to the potential for key issues not included in the extant suite of standards, but critical to the achievement of reasonable assurance in an audit of less complex entities, being omitted from the standalone standard. (Question 7a) 9. We believe that the material on professional scepticism, relevant ethical requirements and quality management is incomplete and does not fully reflect the unique circumstances in which an audit of a less complex entity is undertaken. (Question 7c) 10. We believe that Parts 1, 3 and 6 of ED-ISA for LCE can be improved. We also believe that ISA610 (Using the work of an Internal Auditor) should not be excluded from the standard. (Question 9) 11. We broadly agree with the approach taken with regard to auditor reporting in that specific reference is made to the auditing standard with which the auditor's opinion is formed. We caution, however, that an unintended consequence may be that users incorrectly infer meaning from the use of the standalone standard and may perceive that a lower level of assurance is provided. We suggest that a broad education program would be necessary to address this potential unintended consequence. (Question 10a) 12. We agree with the approach to include a specified format and content of an Auditor's Report as a requirement. (Question 10b) 13. We do not believe that ED-ISA for LCE in its current form will meet the needs of stakeholders. We do not, however, discount the possibility of a revised standalone standard achieving the goal of meeting current challenges associated with audits of less complex entities. (Question 17b) 14. We bel...

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Toward an Understanding of Audit Team Distribution and Performance Quality

Cited by 22 publications

References 76 publications

How workplace identities and team management practices affect distributed team auditors' willingness to speak up

How workplace identities and team management practices affect distributed team auditors' willingness to speak up

Promoting proactive auditing behaviors

Comments of the AFAANZ auditing and assurance standards committee on proposed international standard on auditing ISA for LCE

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