The Effects of Supervisor Preferences and Group Engagement Oversight on Component Auditor Skepticism in a Group Audit Engagement

• In Event: Group Audits and Off-Shoring

Abstract

Recent group auditing guidance expands the monitoring responsibilities of a group engagement team. Thus, component auditors work under the direct oversight of a component supervisor, yet their work is also monitored by the group auditor. This study examines how the nature of group engagement team oversight and component audit supervisor preference interact to influence component auditors’ skepticism. In an experiment, component auditors who faced an optimistic component supervisor budgeted more accounts receivable audit hours when the group engagement team chose to be more actively involved in the component audit process than when the group engagement team chose only to review component audit work. However, there were no differences in budgeted audit hours when auditors faced a skeptical component supervisor, regardless of the level of group engagement team oversight. These results provide insight into group audit decision making processes and suggest ways to enhance auditor skepticism during group audit engagements.

Authors

• John Lauck, Louisiana Tech University

• Sudip Bhattacharjee, Virginia Tech University