Informing Root Cause Analysis of Audit Deficiencies from a Theoretical Perspective.

• In Event: Breakfast and Research & Education Table Forum
  In Roundtable Session: Table 10: Audit deficiencies

Abstract

Regulators around the globe have suggested that auditors’ insufficient attitudes of professional skepticism are one root cause of audit deficiencies (IFIAR 2015, 2016). We investigate the legitimacy of this claim by examining current models of professional skepticism in audit research to gain insights regarding the causal relationship between auditors’ attitudes and their corresponding behaviors. We draw from these models to develop the Auditors’ Attitude Root Cause Framework to inform root cause analysis from a theoretical perspective. Inspired by the Theory of Planned Behavior, our framework includes proxies for auditors’ attitudes of professional skepticism, their attitudes towards others (e.g., firm management, clients, and regulators), and their attitudes associated with their perceived control over the audit. We demonstrate how measuring multiple attitudes marks the first step in understanding actual root causes of audit deficiencies and thus, provides a way forward for responding to regulators’ allegations of a lack of professional skepticism driving auditors’ behaviors. Moreover, an important observation gleaned from our research is that professional skepticism is unlikely a root cause of audit deficiencies, but merely a symptom of a bigger problem.
 

Authors

• Christine J Nolder, Suffolk University

• Kathryn Kadous, Emory University