Cultural differences in auditors' compliance with audit firm policy on fraud risk assessment procedures

Olof Bik*, Reginald Hooghiemstra

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

18 Citaten (Scopus)
94 Downloads (Pure)

Samenvatting

Internationally operating audit firms rely heavily on global firm policies and audit methodologies to ensure consistency of audits across the globe. However, cultural differences are likely to affect auditors’ compliance with such firm-wide systems of control. In this study we use proprietary data from a Big 4’s internal quality reviews, involving 1,152 audit engagements from 29 countries, to assess the impact of cross-national cultural differences on auditors’ compliance (or not) with the firm’s policy in a specific yet crucial and culturally susceptible area of the audit process: fraud risk assessment procedures. We find that collectivism and societal trust are negatively associated, while religiosity is positively associated with compliance with global firm policy. However, we do not find evidence that compliance and power distance are associated. Overall, our findings suggest that cross-national differences in auditors’ compliance with global audit firm methodology (or not) are associated with cross-national cultural differences. An implication of our findings is that a uniform local application of global audit methodologies may remain an illusion unless different, targeted approaches for different regions in the world are considered.
Originele taal-2English
Pagina's (van-tot)25-48
Aantal pagina's24
TijdschriftAuditing: A Journal of Practice and Theory
Volume37
Nummer van het tijdschrift4
DOI's
StatusPublished - nov.-2018

Citeer dit