Factors Affecting the Professional Skepticism of Auditors in Vietnam
Author(s)
Phuong Hoa Le , Thi Duyen Vu , Thi Hoan Nguyen ,
Download Full PDF Pages: 174-189 | Views: 526 | Downloads: 158 | DOI: 10.5281/zenodo.5045106
Abstract
The objective of the study is to identify factors that affect the professional skepticism (PS) of auditors in Vietnamese auditing firms. Research using mixed research methods. Using PLS-SEM analysis technique to test hypotheses with support from software SPSS 23.0 and SmartPLS 3.2.8. The model with data from 318 practicing technicians shows that PS is directly affected by 07 factors belonging to 3 groups, including the group of auditor factors: auditor capacity, professional ethics, personal motivation; Group of factors of audit firms: influence of superiors, pressure of time; customer factor: relationship with customers; External factors: liability. The results show that 4 factors including auditor capacity, professional ethics, personal motivation, and superior influence have positive effects on PS.
Keywords
Professional skepticism, audit quality, Vietnam.
References
i. Churchill, G.A. and Iacobucci, D., 2006. Marketing research: methodological foundations: Dryden Press New York.
ii. Cichello, M.S., Fee, C.E., Hadlock, C.J. and Sonti, R., 2009. Promotions, turnover, and performance evaluation: Evidence from the careers of division managers. The Accounting Review,84,(4),1119-1143.
iii. Ciołek, M., & Emerling, I., 2019. Can We Shape Trait Professional Skepticism through University Accounting Programs? Evidence from Polish University. Sustainability, 11(1), 291.
iv. Clark, V. L. P., and Creswell, J. W., 2008. The mixed methods reader. Sage.
v. Cohen, J. R., and G. M. Trompeter., 1998. An examination of factors affecting audit practice development. Contemporary Accounting Research 15 (4): 481–504.
vi. Cohen, J.R., Dalton, D.W. and Harp, N.L., 2017. Neutral and presumptive doubt perspectives of professional skepticism and auditor job outcomes. Accounting, Organizations and Society,62,1-20.
vii. Cohen, J.R., Pant, L.W. and Sharp, D.J., 1995. An exploratory examination of international differences in auditors’ ethical perceptions. Behavioral Research in Accounting,7,(1),37-64.
viii. Coram, P., Ng, J., & Woodliff, D. R., 2004. The effect of risk of misstatement on the propensity to commit reduced audit quality acts under time budget pressure. Auditing: A Journal of Practice & Theory, 23(2), 159- 167.
ix. Costa, P.T. and McCrae, R.R., 1992. Normal personality assessment in clinical practice: The NEO Personality Inventory. Psychological assessment,4,(1),5.
x. Creswell, John W., and Vicki L. Plano Clark. 2018. Designing and conducting mixed methods research. Sage publications.
xi. Daugherty, B. and Tervo, W., 2010. PCAOB inspections of smaller CPA firms: The perspective of inspected firms. Accounting horizons,24,(2),189- 219.
xii. Dawley, D., Houghton, J.D. and Bucklew, N.S., 2010. Perceived organizational support and turnover intention: The mediating effects of personal sacrifice and job fit. The Journal of Social Psychology,150,(3),238- 257.
xiii. DeAngelo, L.E., 1981. Auditor size and audit quality. Journal of Accounting and Economics,3,(3),183-199.
xiv. DeFond, M. and Zhang, J., 2014. A review of archival auditing research. Journal of Accounting and Economics,58,(2-3),275-326.
xv. DeFond, M.L. and C.S. Lennox. 2017. Do PCAOB inspections improve the quality of internal control audits? Journal of Accounting Research, 55 (3): 591-627.
xvi. DeFond, M.L. and Lennox, C.S., 2011. The effect of SOX on small auditor exits and audit quality. Journal of Accounting and Economics,52,(1),21-40.
xvii. Deis Jr, D.R. and Giroux, G.A., 1992. Determinants of audit quality in the public sector. Accounting Review,462-479.
xviii. Glover, S.M., M.H. Taylor, and Y. Wu., 2017. Current Practices and Challenges in Auditing Fair Value Measurements and Complex Estimates: Implications for Auditing Standards and the Academy. Auditing: A Journal of Practice & Theory, 36 (1): 63-84.
xix. Gonthier‐Besacier, N., Hottegindre, G. and Fine‐Falcy, S., 2016. Audit Quality Perception: Beyond the ‘Role‐Perception Gap’. International Journal of Auditing,20,(2),186-201.
xx. Gramling, A., J. Krishnan, and Y. Zhang. 2011. Are PCAOB-identified audit deficiencies associated with a change in reporting decisions of triennially inspected audit firms? Auditing: A Journal of Practice & Theory, 30(3): 59-79.
xxi. Greene, J., and McClintock, C., 1985. Triangulation in evaluation design and analysis issues. Evaluation Review, 9(5), 523-545.
xxii. Grenier, J.H., 2017. Encouraging professional skepticism in the industry specialization era. Journal of Business Ethics,142,(2),241-256.
xxiii. Griffith, E. E., Hammersley, J. S., & Kadous, K., 2015. Audits of complex estimates as verification of management numbers: How institutional pressures shape practice. Contemporary Accounting Research, 32(3), 833- 863.
xxiv. Griffith, E.E., Hammersley, J.S. and Kadous, K., 2012. Auditing complex estimates: Understanding the process used and problems encountered. Tull School of Accounting, http://ssrn. com/abstract,1857175,(18.5),2013.
xxv. Herda, D.N. and Lavelle, J.J., 2015. Client identification and client commitment in a privately held client setting: Unique constructs with opposite effects on auditor objectivity. Accounting horizons,29,(3),577-601.
xxvi. Hillison, S. M., 2017. Auditors’ acceptance of client-preferred financial reporting: the influence of professional role identities and client importance (Doctoral dissertation, University of Illinois at Urbana-Champaign).
xxvii. Hoffman, V. B., & Zimbelman, M. F., 2012. How strategic reasoning and brainstorming can help auditors detect fraud. Current Issues in Auditing, 6(2), P25-P33.
xxviii. IAASB, 2014. IAASB Strategy for 2015–2019: Fulfilling Our Public Interest Mandate in an Evolving World. New York, International Federation of Accountants.
xxix. IAASB, 2016. Enhancing Audit Quality in the Public Interest: A focus on professional scepticism, quality control and group audits.
xxx. IAASB., 2013. Framework for Audit Quality (Consultation Paper, January 2013). New York, International Federation of Accountants.
xxxi. IFAC., 2006, Basis for Conclusions: IES 8, Competence Requirements for Audit Professionals.
xxxii. Ilgen, D.R., C.D. Fisher, Taylor M.S., 1979. Consequences of individual feedback on behavior in organizations. Journal of Applied Psychology, 64 (4): 349-371.
xxxiii. Johnson, L. M., Keune, M. B., & Winchel, J., 2019. US auditors' perceptions of the PCAOB inspection process: A behavioral examination. Contemporary Accounting Research, 36(3), 1540-1574.
xxxiv. Kornberger, M., Justesen, L., & Mouritsen, J., 2011. “When you make manager, we put a big mountain in front of you”: An ethnography of managers in a Big 4 accounting firm. Accounting, Organizations and Society, 36(8), 514-533.
xxxv. Krishnan, G.V., 2003. Does Big 6 auditor industry expertise constrain earnings management? Accounting horizons,17,1.
xxxvi. Kruglanski, A.W., 1990. Lay epistemic theory in social-cognitive psychology. Psychological Inquiry,1,(3),181-197.
xxxvii. Kunda, Z., 1990. The case for motivated reasoning. Psychological bulletin,108,(3),480.
xxxviii. Kung, F.-H. and Li Huang, C., 2013. Auditors' moral philosophies and ethical beliefs. Management Decision,51,(3),479-500.
xxxix. Kurtz, P., 1992. The new skepticism: Inquiry and reliable knowledge: Prometheus Books.
xl. Kusumawati, A. and Syamsuddin, S., 2018. The effect of auditor quality to professional skepticsm and its relationship to audit quality. International Journal of Law and Management,60,(4),998-1008.
xli. Malsch, B., & Gendron, Y., 2013. Re‐theorizing change: Institutional experimentation and the struggle for domination in the field of public accounting. Journal of Management Studies, 50(5), 870-899.
xlii. Mardijuwono, A.W. and Subianto, C., 2018. Independence, professionalism, professional skepticism: The relation toward the resulted audit quality. Asian Journal of Accounting Research,3,(1),61-71.
xliii. Martinov-Bennie, N. and Pflugrath, G., 2009. The strength of an accounting firm’s ethical environment and the quality of auditors’ judgments. Journal of Business Ethics,87,(2),237-253.
xliv. Ortegren, M., Downen, T. and Kim, S., 2016. Linking Skeptical Judgment with Skeptical Action: Consideration of Client Identification and Professional Commitment.
xlv. Owhoso, V.E., Messier Jr, W.F. and Lynch Jr, J.G., 2002. Error detection by industry‐specialized teams during sequential audit review. Journal of Accounting Research,40,(3),883-900.
xlvi. P.C.A.O.B., 2013. Proposed Auditing Standards – The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion; The Auditor's Responsibilities Regarding Other Information in Certain Documents Containing Audited Financial Statements and the Related Auditor's Report; and Related Amendments to PCAOB Standards (Release No. 2013-005).
xlvii. Raman, J., Smith, E. and Hay, P., 2013. The clinical obesity maintenance model: an integration of psychological constructs including disordered overeating, mood, emotional regulation, habitual cluster behaviours, health literacy and cognitive function. Journal of obesity,2013.
xlviii. Rasso, J.T., 2015. Construal instructions and professional skepticism in evaluating complex estimates. Accounting, Organizations and Society,46,44- 55.
xlix. Ratzinger-Sakel, N. V., & Theis, J., 2018. Does considering key audit matters affect auditor judgment performance?. SSRN.
l. Shefchik, L. B., 2014, Potential benefits and unintended consequences of risk-based inspections on auditor behavior, Working paper (Scheller College of Business, Georgia Institute of Technology).
li. Shelton, S.W., 1999. The effect of experience on the use of irrelevant evidence in auditor judgment. The Accounting Review,74,(2),217-224.
lii. Shou, Y., & Smithson, M., 2015. Evaluating predictors of dispersion: A comparison of dominance analysis and bayesian model averaging. Psychometrika, 80(1), 236- 256.
liii. Simnett, R., Carson, E. and Vanstraelen, A., 2016. International archival auditing and assurance research: Trends, methodological issues, and opportunities. AUDITING: A Journal of Practice & Theory,35,(3),1-32.
liv. Taylor, E. Z., & Curtis, M. B., 2010. An examination of the layers of workplace influences in ethical judgments: Whistleblowing likelihood and perseverance in public accounting. Journal of Business Ethics, 93(1), 21-37.
lv. Taylor, M.H., 2000. The effects of industry specialization on auditors' inherent risk assessments and confidence judgements. Contemporary Accounting Research,17,(4),693-712.
lvi. Tetlock, P.E., 1983. Accountability and complexity of thought. Journal of personality and social psychology,45,(1),74.
lvii. Tetlock, P.E., 1992. The impact of accountability on judgment and choice: Toward a social contingency model. Advances in experimental social psychology. Elsevier. pp. 331-376.
lviii. Trompeter, G. M., Carpenter, T. D., Desai, N., Jones, K. L., & Riley, R. A., 2013. A synthesis of fraud-related research. AUDITING: A Journal of Practice & Theory,32,(sp1),287-321.
lix. Yin, R., 2009. Case study research. Design and methods. United States of America: Sage
lx. Zikmund, W. G., Babin, J. B., Carr, J. C., & Griffin M., 2010. Business research methods. Mason, OH: Cengage.
lxi. Zimmerman, A.B., 2016. The joint impact of management expressed confidence and response timing on auditor professional skepticism in client email inquiries. Managerial Auditing Journal,31,(6/7),566-588.
Cite this Article: