Coaching Today’s Auditors: When Do Workpaper Reviewers Professionally Develop Their Preparers?

• In Event: Emerging Issues in Audit Quality

Abstract

Audit workpaper review is a quality control mechanism intended to detect preparer errors in the short-term and professionally develop preparers in the long-term. Currently, it is unclear as to what factors drive reviewers to professionally develop (or not develop) their preparers. Furthermore, whether error detection and professional development complement or compete during supervisory review is not known. As audit teams become more global, new contextual factors are introduced into the audit environment that may influence a supervisor’s review quality. In this study, we investigate how the preparer’s office location (local vs. international) and the likelihood of preparer recurrence affect the reviewer’s propensity to focus on the professional development of the preparer. We find that reviewers identify more with preparers from their local (vs. international) office and, as a result, focus more on professionally developing local preparers. We also observe that, regardless of office affiliation, reviewers are more apt to coach preparers who are likely (vs. unlikely) to recur the next year because they anticipate reaping future personal benefits from recurring preparers. Finally, we find that reviewers who focus more on developing preparers are also more likely to detect errors in preparer audit documentation.

Authors

• Lindsay Andiola, Virginia Commonwealth University

• Joseph F Brazel, North Carolina State University

• Denise Hanes Downey, Villanova University

• Tammie J Schaefer, University of Missouri - Kansas City