Shifting Styles: Do Audit Workpaper Reviewers Tailor Feedback on Audit Engagements?

• In Event: Workpaper Reviews, Reviewers & Audit Quality

Abstract

In an effort to obtain an updated understanding of the audit workpaper review process and its implications for auditor learning and development, we conduct a field survey of practicing audit partners, managers, and in-charge/senior associates. Specifically, we ask reviewers about their preferred review style, their likelihood of taking over work initially started by subordinates, their propensity to self-correct audit workpapers, and the reasons why they self correct audit documentation. Our survey was completed by partners, managers, and in-charge/senior associates from local offices of each of the Big 4 accounting firms and one additional international accounting firm. Results indicate differences in how reviewers prefer to interact with different types of preparers, with 94% (75%) of reviewers preferring to use face-to-face communication with below-average (above-average) performers. In addition, a larger portion of reviewers prefer to use firm software with above-average performers (15%) than below average performers (1%). Results also indicate that audit workpaper reviewers correct and/or update workpaper documentation more frequently for below-average performing subordinates (31.6% of the time) than above-average performing subordinates (16.8% of the time). However, when reviewers self-correct audit documentation, they are more likely to update the documentation for more complex tasks than less complex tasks, regardless of performer level. These findings make significant contributions to the advancement of both academic research and professional practice. First, we answer requests within the accounting academy to obtain an understanding of how the nature of communications in the review process has changed since foundational papers in this area were published. Second, we provide accounting firms with insight into review process issues that may contribute to recent regulatory scrutiny of audit supervision practices. These findings are critical, as the review process is a fundamental component for coaching, training, and growth within the structure of the typical accounting firm and can significantly influence career development, job satisfaction, and employee turnover.

Authors

• Christine Gimbar, DePaul University

• James Greg Jenkins, Virginia Tech University

• Gabriel Saucedo, Seattle University

• Nicole Wright, Northeastern University