To effectively manage audit risk, auditors must anticipate potential litigation and reputation consequences associated with inaccurate accounting estimates. Our paper examines whether auditors correctly anticipate these consequences. We provided 57 manager- and partner-level auditors with case...

Purpose: This paper aims to examine the perceptions of auditor roles on the workpaper review process in current audit practice. Specifically, the paper investigates how an auditor’s defined role leads to perceived differences in what initiates the workpaper review process, the preferred...

This study explores two potential safeguards against liability when auditors exercise professional skepticism, but do not detect a fraud: (1) a firm policy requiring a specific level of professional skepticism in high-risk audit areas and (2) providing jurors with key differences between the...

The Public Company Accounting Oversight Board recently proposed amendments to the standard audit report that would require the disclosure of critical audit matters (CAMs), and the Securities and Exchange Commission continues to evaluate the use of principles-based (imprecise) accounting...

The U.S. Public Company Accounting Oversight Board recently proposed changes to the audit reporting model that would require auditors to disclose areas of high audit risk within the audit report. Concerns about the proposal's potential to increase auditor liability have been raised by...

In this research note, we replicate Brazel, Jackson, Schaefer, and Stewart's (2016) study of how auditors evaluate skeptical behavior. Like the original study, we find that evaluators reward audit staff who exercise appropriate levels of skepticism and identify a misstatement (positive outcome)....