Evidence of the Relationship between PCAOB Inspection Outcomes and the Use of Structured Audit Technologies

Colleen M. Boland, Brian E. Daugherty, and Denise Dickins (2019) Evidence of the Relationship between PCAOB Inspection Outcomes and the Use of Structured Audit Technologies. AUDITING: A Journal of Practice & Theory: May 2019, Vol. 38, No. 2, pp. 57-77.

Posted: 8 Aug 2019

See all articles by Colleen M. Boland

Colleen M. Boland

University of Wisconsin - Milwaukee - Sheldon B. Lubar School of Business

Brian Daugherty

University of Wisconsin - Milwaukee

Denise Dickins

East Carolina University

Date Written: May 1, 2019

Abstract

We investigate the relationship between Public Company Accounting Oversight Board (PCAOB) inspection outcomes and auditors' use of structured audit technologies (SATs) by conducting interviews with audit partners of firms inspected annually by the PCAOB, surveying triennially-inspected auditing firms, and relating auditors' reported SAT adoptions and use with their firm-specific inspection outcomes. It has been observed that auditors are adopting SATs to improve PCAOB inspection outcomes. While our evidence is consistent with this observation and motivation, we do not find evidence that SATs are an effective strategy to improve inspection outcomes. We discuss the potential reasons for this inconsistency, the most important of which may be auditors' expressed concerns about the negative impact SATs have on auditors' critical thinking skills, professional judgment, and skepticism. Supplemental tests relating auditors' SAT adoptions to their client-specific audit fees also provide initial support for auditors' reports that SATs are efficient audit tools.

Keywords: standardized audit forms and processes, decision aids, critical thinking, professional judgment, skepticism, PCAOB inspections, audit fees, audit efficiency

Suggested Citation

Boland, Colleen M. and Daugherty, Brian and Dickins, Denise, Evidence of the Relationship between PCAOB Inspection Outcomes and the Use of Structured Audit Technologies (May 1, 2019). Colleen M. Boland, Brian E. Daugherty, and Denise Dickins (2019) Evidence of the Relationship between PCAOB Inspection Outcomes and the Use of Structured Audit Technologies. AUDITING: A Journal of Practice & Theory: May 2019, Vol. 38, No. 2, pp. 57-77.. Available at SSRN: https://ssrn.com/abstract=3432707

Colleen M. Boland (Contact Author)

University of Wisconsin - Milwaukee - Sheldon B. Lubar School of Business ( email )

P.O. Box 742
3202 N. Maryland Ave.
Milwaukee, WI 53201-0742
United States

Brian Daugherty

University of Wisconsin - Milwaukee ( email )

Sheldon B. Lubar School of Business
P.O. Box 742
Milwaukee, WI 53201-0742
United States
414-229-5737 (Phone)
414-229-5999 (Fax)

HOME PAGE: http://www4.uwm.edu/business/faculty/busfaculty/daugherty.cfm

Denise Dickins

East Carolina University ( email )

United States

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