Auditing Teams: Dynamics and Efficiency PDF
Preview Auditing Teams: Dynamics and Efficiency
Auditing Teams The recent audit failures which have rocked financial markets worldwide have accentuated the need for a better understanding of the link between risk, control and audit quality; as well as emphasising the need to open the “black box” of the ways auditing firms actually function. Reflecting these imperatives, Auditing Teams unravels the organizational and management issues in audit firms that are key to achieving effectiveness in service provision. Specifically, this key research reflects upon the relevance and dynamics of audit- ing teams and their impact on auditing quality, and specifically responding to the recent claim from regulators which highlights auditing team characteristics as the source of wide variations in quality. By leveraging different perspectives – auditing, management accounting, organi- zation and psychology – to investigate auditing teams and basing on evidence col- lected from the professional world, this book will provide a unique insight into the role of auditing teams on audit quality. It will be of great interest to scholars and advanced students in auditing, as well as to practitioners and regulators in the field. Mara Cameran, PhD, is researcher of accounting at Università Bocconi and profes- sor of SDA at the Bocconi School of Management in Milan, Italy. She is an Italian CPA (Dottore Commercialista) and chartered auditor (Revisore Contabile), a member of the European Auditing Research Network (EARNet) scientific committee, and the European Accounting Association representative in the Consultative Advisory Group (CAG) of the International Accounting Education Standards Board (IAESB). Angelo Ditillo, PhD, is associate professor of management accounting and control at Università Bocconi and professor of SDA Bocconi School of Management, Milan, Italy. He has been a visiting professor in many different institutions, including the Saïd Business School at the University of Oxford, the Iese Business School and the ESADE Business School in Spain, the University of Technology in Sydney, Australia, and the University of Paris, Dauphine. Angela Pettinicchio, PhD, is assistant professor and instructor of financial reporting and International Accounting at Università Bocconi in Milan, Italy. She is a faculty member of the Accounting, Control, Corporate and Real Estate Finance Department and coordinator of the Financial Frauds Area of the Osservatorio di Revisione (Audit Research Center) at the SDA Bocconi School of Management in Milan. Routledge Focus on Business and Management For a full list of titles in this series, please visit https://www.routledge.com/ business/series/FBM The fields of business and management have grown exponentially as areas of research and education. This growth presents challenges for readers try- ing to keep up with the latest important insights. Routledge Focus on Busi- ness and Management presents small books on big topics and how they intersect with the world of business. Individually, each title in the series provides coverage of a key academic topic, whilst collectively, the series forms a comprehensive collection across the business disciplines. Truth in Marketing A theory of claims evidence relations Thomas Boysen Anker A Short Guide to People Management For HR and line managers Antonios Panagiotakopoulous Understanding the Born Global Firm Neri Karra The Internet of Things and Business Martin De Saulles The Search for Entrepreneurship Simon Bridge Neurobusiness Stephen Rhys Thomas Auditing Teams Dynamics and Efficiency Mara Cameran, Angelo Ditillo and Angela Pettinicchio Auditing Teams Dynamics and Efficiency Mara Cameran, Angelo Ditillo and Angela Pettinicchio First published 2017 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2017 Mara Cameran, Angelo Ditillo and Angela Pettinicchio The right of Mara Cameran, Angelo Ditillo and Angela Pettinicchio to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Cameran, Mara, 1970– author. | Pettinicchio, Angela, 1981– author. | Ditillo, Angelo, 1970– author. Title: Auditing teams : dynamics and efficiency / Mara Cameran, Angela Pettinicchio, Angelo Ditillo. Description: 1 Edition. | New York : Routledge, 2017. | Includes bibliographical references and index. Identifiers: LCCN 2016056822 (print) | LCCN 2016057627 (ebook) | ISBN 9781138682702 (hardback : alk. paper) | ISBN 9781315544953 (ebk) | ISBN 9781315544953 (eBook) Subjects: LCSH: Auditing. | Teams in the workplace. Classification: LCC HF5667. C256 2017 (print) | LCC HF5667 (ebook) | DDC 657/.45—dc23 LC record available at https://lccn.loc.gov/2016056822 ISBN: 978-1-138-68270-2 (hbk) ISBN: 978-1-315-54495-3 (ebk) Typeset in Times New Roman by Apex CoVantage, LLC To our sons Claudio, Daniele, Emilio and Gioele, who every day remind us about the beauty of curiosity Contents 1 Introduction 1 2 The management of auditing firms 4 3 Individual auditors 13 4 Auditing teams 48 5 Auditing teams control 71 6 Evidence from the field 90 7 Conclusions 115 Index 119 1 I ntroduction The audit failures that have shocked financial markets worldwide have accentuated the need for opening the “black box” of auditing firms’ func- tioning. With this premise, this book has the objective to explore the audit firms’ organizational and management issues that are key to achieve effec- tiveness in auditing service provision. More specifically, starting from acknowledging the knowledge-intensive nature of audit firms and illus- trating the relevant characteristics of individual auditors, this work aims to reflect upon the relevance and dynamics of auditing teams and their impact on auditing quality. Our work represents a response to the recent claim from regulators that consider audit team characteristics as particularly important: Based on more than ten years of oversight, the Board knows that, even within a single firm and notwithstanding firm-wide or network-wide quality control systems, the quality of individual audit engagements varies. PCAOB inspectors have observed a wide variation in the quality of auditing by many engagement teams. (PCAOB 2013: 6) An important distinctive element of our contribution is that it leverages on different disciplines (psychology, organization, auditing and manage- ment accounting) to investigate audit teams, and we complement our argu- ments with evidence collected from the professional world. In our book, we examine the specific features of audit teams as well as their dynamics, which matter in terms of the final performance they are able to achieve. In particular, we analyze the impact of group characteristics, the interaction between individuals, and the corresponding forms of control adopted at the team level on audit quality. In fact, individual auditors do not operate in isolation and their behaviour depends on the dynamics activated within the audit teams in which they work.
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