ARCA Seminar Therese Grohnert
12:00 - 14:00
Fostering Auditors’ Professional Skepticism through a Supportive Firm Learning Culture - a Knowledge Development Approach
Therese Grohnert (Maastricht University)
Amsterdam Business Research Institute
Business and Organisation
Conference / Symposium / Seminar
This seminar will take place on Monday, February 11 from 12.00 to 14.00 in 8A-44 VU main building.
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Auditors are required to apply professional skepticism throughout the audit process: when searching for relevant and reliable information, when forming a judgment, and when deciding on which actions to take. Consequently, audit firms have a vested interest in fostering professional skepticism. Extant conceptual models propose that knowledge is a central driver of professional skepticism, yet a common measure of knowledge - experience - has proven to be an unreliable proxy: it does not take into account that auditors have to learn from experience to develop knowledge. Insights from psychology and management studies emphasize that this learning does not occur automatically, but that it can be fostered at the firm level through a supportive learning culture. Based on these streams of research, the present study explores two main questions. First, do auditors of higher ranks engage in more or less skeptical information search, and do they formulate more or less skeptical judgments? Second, does a firm’s learning culture interact with rank to foster professional skepticism? We observed information search and recorded judgments of 166 auditors across ranks using a representative audit task. Our results show that higher-ranking auditors do not consistently engage in more skeptical information search or judgment, only those who worked in a supportive learning culture did. In the absence of such a culture, rank was negatively related to professional skepticism, specifically at higher ranks. A supportive learning culture is therefore essential for enabling the ongoing development of knowledge, and exercising professional skepticism.