The Effect of On-the-Job Training on the Perceived Ability of In Charge Auditors and Their Willingness to Train Others

• In Event: Audit Considerations

Abstract

This research examines the role of on-the-job training (OJT) on the confidence and perceived ability of in charge auditors. Specifically we examine characteristics of both one-on-one (informal) OJT and classroom-style (formal) OJT on auditors’ perceptions about knowledge acquisition and confidence in their ability to perform at a high level on audit engagements. We also examine how the nature of OJT received impacts auditors’ propensity to train junior level staff. The main research question to be addressed in this study is, “How does informal and formal OJT impact auditors’ perceptions of their own on-the-job learning (OTJL), and how do they pass this OTJL onto others?” We examine changes in these factors over time, by comparing data collected pre-Sarbanes Oxley (SOX), to data collected post-SOX. We conducted a survey in 1999 of in-charge (senior) auditors, which examined the impact of two types of informal OJT mechanisms, guidance and feedback, on their self-assessed ability to perform audits proficiently, and propensity to provide guidance and feedback to their assistants. We also assessed their perceptions of formal OJT. We then conducted the same survey fifteen years later post-SOX (in 2014) to see if the impact of informal and formal OJT on auditors’ perceptions had changed. In addition, we collected open-ended responses in 2014 to determine what environmental factors influenced auditors’ perceptions. Results indicate that high levels of informal training (guidance and feedback) result in higher levels of auditor perceptions of ability (and conversely lower levels of both result in lower perceptions). Both informal OJT and formal OJT impact perceptions to a significant degree, but as predicted the effect is greater for informal OJT than formal OJT. In addition, higher levels of both informal and formal OTJ training elements led to higher levels of these elements being passed on to lower level staff, mediated by the level of perceived ability. In terms of comparisons of the results over time periods, there are only a few differences in results from pre- to post SOX. For example, the results post-SOX indicate that informal training has not decreased in quality over time and formal training has significantly improved over time. We identify environmental factors within firms that influence these results and discuss the implications of these finding for enhancing OJT in auditing firms in order to enhance audit quality.

Authors

• Christine Earley, Providence College

• Noah P Barsky, Villanova University