The aim of this study is to investigate the relative personality preferences of accounting and no... more The aim of this study is to investigate the relative personality preferences of accounting and non-accounting graduates seeking to enter the accounting profession. This study is motivated by the recent changes within the Australian accounting profession to encourage non-accounting graduates to enter the discipline, a key motivation for which is a perceived need to attract a greater diversity of individuals to pursue careers in accounting. Using the personality preferences (as measured using the Myers-Briggs Type Indicator [MBTI]) as an indicator of diversity, the results of this study signify that accounting and non-accounting graduates seeking to enter the accounting profession are likely to share similar personality preferences. The implications of this finding for a range of stakeholders associated with the accounting profession, and for matters such as stereotypical images of accountants, graduate recruitment, and university and professional curriculum development are discussed.
ABSTRACT 'Business risk' is a concept that has emerged from the recent developmen... more ABSTRACT 'Business risk' is a concept that has emerged from the recent development in new audit methodologies. This paper investigates auditor perceptions of business risk factors in the planning stage of an audit. Auditors were asked to classify risk factors as to whether the factors are primarily business risk or inherent risk. We also examine how auditors modify their audit strategies based upon the categorisation of risks, and the impact on their ability to detect risk of fraud from the consideration of those risk factors. Results indicate that auditors perceive business risk as a distinct risk factor. There is however some overlapping of business risk and inherent risk factors, and some risk factors previously considered as inherent risk now appear to be included as business risk. Results indicate a weak articulation between business risk and audit strategy. To the extent that auditors do adjust audit strategy for business risk, auditors increase analytical procedures rather than detailed substantive testing. Auditors did not view business risk factors as impacting their ability to detect risk of fraud.
Effectively communicating moderate levels of assurance Summary A recent development in the assura... more Effectively communicating moderate levels of assurance Summary A recent development in the assurance services profession is the emergence of engagements on a broad range of subject matter that are designed to provide a moderate level of assurance. A significant issue for the profession is how to convey to users the limited extent of the assurance provided by such engagements. This study identifies four main categories of moderate assurance reporting forms (opinion on procedures, negative assurance, positive assurance, positive assurance with a limitations paragraph) currently being used in practice worldwide in relation to the provision of assurance on environmental and sustainability reports. It examines whether these four reporting forms convey a lower level of assurance than that provided by a traditional high assurance report, and whether these reporting formats lead to significantly different levels of assurance perceived by a group of 792 shareholders. The findings indicate that users do perceive that these moderate assurance reporting formats generally provide a lower level of assurance than that provided by a high assurance report. Only one significant difference was found between the four types of moderate assurance reports, with the opinion on procedures format providing higher assurance than the positive assurance with a limitations paragraph format. Implications for policy makers in their current deliberations on assurance report wording in relation to moderate assurance engagements.
This study investigates the effect a regime of mandatory audit firm rotation would have on audit ... more This study investigates the effect a regime of mandatory audit firm rotation would have on audit quality in an Australian setting. Using two measures of audit quality, being the propensity to issue a going-concern report and the level of discretionary accruals, the study examines the switching patterns of clients in their current voluntary switching capacity, and the levels of audit quality. We find that audit quality increases with audit firm tenure, when proxied by the propensity to issue a going concern opinion, and is unaffected when proxied by the level of discretionary accruals. We conclude that given the additional costs associated with switching auditors there are minimal, if any, benefits of mandatory audit firm rotation. Other initiatives to address concerns about auditor independence and audit quality therefore need be considered before imposing mandatory audit firm rotation.
This study focuses on how inherent risk and materiality assessments are made and how they are int... more This study focuses on how inherent risk and materiality assessments are made and how they are integrated in the planning of audit testing. Both of these assessments are an integral part of the audit planning process under the current 'audit risk model'.
. Part of this research involved surveying the types of assurance services undertaken by 56 assur... more . Part of this research involved surveying the types of assurance services undertaken by 56 assurance firms from 11 different countries, the levels of assurance at which these assurance services were generally provided, and for those services provided as moderate assurance services, the reasons why. This paper re-analyses this data and extends the IFAC research report (2002) by examining the differences between the types of assurance services (other than historical financial statement assurance) and levels at which these assurance services are provided by the former Big 5 audit firms compared with the non-Big 5 audit firms. Information was also collected on 166 moderate assurance engagements provided by these participating assurance firms. The determinants of the level of assurance for these assurance service engagements were identified and differences between the Big 5 and the non-Big 5 audit firms are reported.
This study examines the impact of the introduction of the legally enforceable Australian Auditing... more This study examines the impact of the introduction of the legally enforceable Australian Auditing Standards (ASAs) on the auditing profession after the first year of implementation. The study compliments and extends the Australian Government's April 2006 pre-implementation Regulation Impact Statement (RIS) which identified potential costs, benefits and other impacts of the new regulatory regime. Relevant data was collected through interviews with RIS key stakeholders. Overall, the results suggest that the additional burden of compliance with the legally enforceable ASAs has not increased audit quality or public confidence, which were the main aims of the government's regulatory intervention.
The existence of audit committees in public companies can improve the quality of the financial re... more The existence of audit committees in public companies can improve the quality of the financial reporting process, aid the actual and perceived independence of both the internal and external auditors, and improve financial statement users' confidence in the quality of ...
This study outlines the results of a survey undertaken at an Australian university in 2007 and ex... more This study outlines the results of a survey undertaken at an Australian university in 2007 and examines the factors that are associated with an undergraduate accounting student obtaining a job offer. Undertaking relevant part-time work, academic performance and social (extra-...
This report is an extensive study of the determination and communication of levels of assurance o... more This report is an extensive study of the determination and communication of levels of assurance other than high. The accurate determination and effective communication of levels of assurance provided in assurance engagements are critical issues for the well-being of the ...
Internationally, the escalating number of cases levelled against auditors and the costs of defend... more Internationally, the escalating number of cases levelled against auditors and the costs of defending such actions has led to the auditing profession calling for measures to reduce their liability burden. Relatively few measures have been taken by the auditing profession by way of adapting the disclosure contained in the audit report to mitigate their litigation risk. This study examines whether the issuance of an audit opinion with a going concern related 'emphasis of matter' paragraph or work practices disclosure has any effect on potential litigants' likelihood of pursuing litigation against the auditor. An analysis of 69 responses from advanced law students and 18 practitioners working in corporate liquidation demonstrate that a modified (but not qualified) audit report effectively acts as a 'red flag' and reduces potential litigants' propensity to initiate litigation. However, work practices disclosure did not significantly alter potential litigants' inclination to recommend litigation. Despite this finding, respondents (particularly liquidators) indicated that work practices disclosure was an important factor in their litigation decision. These results suggest that further investigation into how to effectively disclose the work done on audit and assurance engagements is needed. This has implications for standard setters and the auditing profession, especially considering recent changes in the disclosure contained in audit and assurance reports.
The aim of this study is to investigate the relative personality preferences of accounting and no... more The aim of this study is to investigate the relative personality preferences of accounting and non-accounting graduates seeking to enter the accounting profession. This study is motivated by the recent changes within the Australian accounting profession to encourage non-accounting graduates to enter the discipline, a key motivation for which is a perceived need to attract a greater diversity of individuals to pursue careers in accounting. Using the personality preferences (as measured using the Myers-Briggs Type Indicator [MBTI]) as an indicator of diversity, the results of this study signify that accounting and non-accounting graduates seeking to enter the accounting profession are likely to share similar personality preferences. The implications of this finding for a range of stakeholders associated with the accounting profession, and for matters such as stereotypical images of accountants, graduate recruitment, and university and professional curriculum development are discussed.
ABSTRACT 'Business risk' is a concept that has emerged from the recent developmen... more ABSTRACT 'Business risk' is a concept that has emerged from the recent development in new audit methodologies. This paper investigates auditor perceptions of business risk factors in the planning stage of an audit. Auditors were asked to classify risk factors as to whether the factors are primarily business risk or inherent risk. We also examine how auditors modify their audit strategies based upon the categorisation of risks, and the impact on their ability to detect risk of fraud from the consideration of those risk factors. Results indicate that auditors perceive business risk as a distinct risk factor. There is however some overlapping of business risk and inherent risk factors, and some risk factors previously considered as inherent risk now appear to be included as business risk. Results indicate a weak articulation between business risk and audit strategy. To the extent that auditors do adjust audit strategy for business risk, auditors increase analytical procedures rather than detailed substantive testing. Auditors did not view business risk factors as impacting their ability to detect risk of fraud.
Effectively communicating moderate levels of assurance Summary A recent development in the assura... more Effectively communicating moderate levels of assurance Summary A recent development in the assurance services profession is the emergence of engagements on a broad range of subject matter that are designed to provide a moderate level of assurance. A significant issue for the profession is how to convey to users the limited extent of the assurance provided by such engagements. This study identifies four main categories of moderate assurance reporting forms (opinion on procedures, negative assurance, positive assurance, positive assurance with a limitations paragraph) currently being used in practice worldwide in relation to the provision of assurance on environmental and sustainability reports. It examines whether these four reporting forms convey a lower level of assurance than that provided by a traditional high assurance report, and whether these reporting formats lead to significantly different levels of assurance perceived by a group of 792 shareholders. The findings indicate that users do perceive that these moderate assurance reporting formats generally provide a lower level of assurance than that provided by a high assurance report. Only one significant difference was found between the four types of moderate assurance reports, with the opinion on procedures format providing higher assurance than the positive assurance with a limitations paragraph format. Implications for policy makers in their current deliberations on assurance report wording in relation to moderate assurance engagements.
This study investigates the effect a regime of mandatory audit firm rotation would have on audit ... more This study investigates the effect a regime of mandatory audit firm rotation would have on audit quality in an Australian setting. Using two measures of audit quality, being the propensity to issue a going-concern report and the level of discretionary accruals, the study examines the switching patterns of clients in their current voluntary switching capacity, and the levels of audit quality. We find that audit quality increases with audit firm tenure, when proxied by the propensity to issue a going concern opinion, and is unaffected when proxied by the level of discretionary accruals. We conclude that given the additional costs associated with switching auditors there are minimal, if any, benefits of mandatory audit firm rotation. Other initiatives to address concerns about auditor independence and audit quality therefore need be considered before imposing mandatory audit firm rotation.
This study focuses on how inherent risk and materiality assessments are made and how they are int... more This study focuses on how inherent risk and materiality assessments are made and how they are integrated in the planning of audit testing. Both of these assessments are an integral part of the audit planning process under the current 'audit risk model'.
. Part of this research involved surveying the types of assurance services undertaken by 56 assur... more . Part of this research involved surveying the types of assurance services undertaken by 56 assurance firms from 11 different countries, the levels of assurance at which these assurance services were generally provided, and for those services provided as moderate assurance services, the reasons why. This paper re-analyses this data and extends the IFAC research report (2002) by examining the differences between the types of assurance services (other than historical financial statement assurance) and levels at which these assurance services are provided by the former Big 5 audit firms compared with the non-Big 5 audit firms. Information was also collected on 166 moderate assurance engagements provided by these participating assurance firms. The determinants of the level of assurance for these assurance service engagements were identified and differences between the Big 5 and the non-Big 5 audit firms are reported.
This study examines the impact of the introduction of the legally enforceable Australian Auditing... more This study examines the impact of the introduction of the legally enforceable Australian Auditing Standards (ASAs) on the auditing profession after the first year of implementation. The study compliments and extends the Australian Government's April 2006 pre-implementation Regulation Impact Statement (RIS) which identified potential costs, benefits and other impacts of the new regulatory regime. Relevant data was collected through interviews with RIS key stakeholders. Overall, the results suggest that the additional burden of compliance with the legally enforceable ASAs has not increased audit quality or public confidence, which were the main aims of the government's regulatory intervention.
The existence of audit committees in public companies can improve the quality of the financial re... more The existence of audit committees in public companies can improve the quality of the financial reporting process, aid the actual and perceived independence of both the internal and external auditors, and improve financial statement users' confidence in the quality of ...
This study outlines the results of a survey undertaken at an Australian university in 2007 and ex... more This study outlines the results of a survey undertaken at an Australian university in 2007 and examines the factors that are associated with an undergraduate accounting student obtaining a job offer. Undertaking relevant part-time work, academic performance and social (extra-...
This report is an extensive study of the determination and communication of levels of assurance o... more This report is an extensive study of the determination and communication of levels of assurance other than high. The accurate determination and effective communication of levels of assurance provided in assurance engagements are critical issues for the well-being of the ...
Internationally, the escalating number of cases levelled against auditors and the costs of defend... more Internationally, the escalating number of cases levelled against auditors and the costs of defending such actions has led to the auditing profession calling for measures to reduce their liability burden. Relatively few measures have been taken by the auditing profession by way of adapting the disclosure contained in the audit report to mitigate their litigation risk. This study examines whether the issuance of an audit opinion with a going concern related 'emphasis of matter' paragraph or work practices disclosure has any effect on potential litigants' likelihood of pursuing litigation against the auditor. An analysis of 69 responses from advanced law students and 18 practitioners working in corporate liquidation demonstrate that a modified (but not qualified) audit report effectively acts as a 'red flag' and reduces potential litigants' propensity to initiate litigation. However, work practices disclosure did not significantly alter potential litigants' inclination to recommend litigation. Despite this finding, respondents (particularly liquidators) indicated that work practices disclosure was an important factor in their litigation decision. These results suggest that further investigation into how to effectively disclose the work done on audit and assurance engagements is needed. This has implications for standard setters and the auditing profession, especially considering recent changes in the disclosure contained in audit and assurance reports.
Uploads
Papers by Peter Roebuck