{"title":"Auditor's responses to changes in risk","authors":"Michael E. Bradbury, Tom Scott","doi":"10.1111/ijau.12288","DOIUrl":null,"url":null,"abstract":"<p>This paper examines whether auditors plan engagements to be the same-as-last-year (SALY) and if they respond to changes in risk both before and during audit engagements by varying engagements from planned. These are important questions considering audit standards require the assessment of risk and general concerns about audit quality and fee pressure. We provide new insights using a proprietary database containing both quoted and reported audit hours and fees. We find that the basis quoted audit hours and billing rates (i.e., audit plans) are prepared on is not SALY. However, as there is little difference for audit hours, we conclude that they are based-on-last-year (BOLY). Changes in audit characteristics are associated with the variance between quoted and reported audit hours and billing rates. In addition, auditors with higher reputational risk quote more audit hours and have a higher quoted average billing rate and further increase them from quoted.</p>","PeriodicalId":47092,"journal":{"name":"International Journal of Auditing","volume":null,"pages":null},"PeriodicalIF":2.1000,"publicationDate":"2022-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/ijau.12288","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Auditing","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/ijau.12288","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This paper examines whether auditors plan engagements to be the same-as-last-year (SALY) and if they respond to changes in risk both before and during audit engagements by varying engagements from planned. These are important questions considering audit standards require the assessment of risk and general concerns about audit quality and fee pressure. We provide new insights using a proprietary database containing both quoted and reported audit hours and fees. We find that the basis quoted audit hours and billing rates (i.e., audit plans) are prepared on is not SALY. However, as there is little difference for audit hours, we conclude that they are based-on-last-year (BOLY). Changes in audit characteristics are associated with the variance between quoted and reported audit hours and billing rates. In addition, auditors with higher reputational risk quote more audit hours and have a higher quoted average billing rate and further increase them from quoted.
期刊介绍：
In addition to communicating the results of original auditing research, the International Journal of Auditing also aims to advance knowledge in auditing by publishing critiques, thought leadership papers and literature reviews on specific aspects of auditing. The journal seeks to publish articles that have international appeal either due to the topic transcending national frontiers or due to the clear potential for readers to apply the results or ideas in their local environments. While articles must be methodologically and theoretically sound, any research orientation is acceptable. This means that papers may have an analytical and statistical, behavioural, economic and financial (including agency), sociological, critical, or historical basis. The editors consider articles for publication which fit into one or more of the following subject categories: • Financial statement audits • Public sector/governmental auditing • Internal auditing • Audit education and methods of teaching auditing (including case studies) • Audit aspects of corporate governance, including audit committees • Audit quality • Audit fees and related issues • Environmental, social and sustainability audits • Audit related ethical issues • Audit regulation • Independence issues • Legal liability and other legal issues • Auditing history • New and emerging audit and assurance issues
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