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Annelin, A. & Svanström, T. (2024). Audit team diversity, work quality and affective state outcomes. International Journal of Auditing
Open this publication in new window or tab >>Audit team diversity, work quality and affective state outcomes
2024 (English)In: International Journal of Auditing, ISSN 1090-6738, E-ISSN 1099-1123Article in journal (Refereed) Epub ahead of print
Abstract [en]

This paper investigates the audit team outcomes of team diversity. Diversity theory suggests that diversity can benefit a team's work quality if the variety of team characteristics improves decision-making and performance. However, team diversity can have harmful affective outcomes if team members separate into different categories, and thus they feel stressed, intend to leave the profession or experience conflict between team members. We investigated this paradox in team diversity in an audit context at a Big 4 audit firm in Sweden, which provided proprietary team data. In addition, 335 individuals from 185 different audit teams responded to a questionnaire. Each participant responded to a survey about their experience with one specific engagement. Results indicated that team diversity benefits the audit team's affective outcomes of role stress, satisfaction and turnover intentions. However, diverse teams also reduce some audit teams' work quality outcomes, such as dysfunctional behaviour, performance, effort and perceptions of audit quality.

Place, publisher, year, edition, pages
John Wiley & Sons, 2024
Keywords
affective state, audit team, gender, rank diversity work quality, team diversity
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-225848 (URN)10.1111/ijau.12354 (DOI)001231651500001 ()2-s2.0-85194458581 (Scopus ID)
Funder
Jan Wallander and Tom Hedelius Foundation and Tore Browaldh Foundation, p 14-0088Jan Wallander and Tom Hedelius Foundation and Tore Browaldh Foundation, p 18-0029
Available from: 2024-06-13 Created: 2024-06-13 Last updated: 2024-06-13
Che, L., Myllymäki, E.-R. & Svanström, T. (2023). Auditors’ Self-Assessment of Engagement Quality and the Role of Stakeholder Priority. Accounting and Business Research, 53(3), 335-375
Open this publication in new window or tab >>Auditors’ Self-Assessment of Engagement Quality and the Role of Stakeholder Priority
2023 (English)In: Accounting and Business Research, ISSN 0001-4788, E-ISSN 2159-4260, Vol. 53, no 3, p. 335-375Article in journal (Refereed) Published
Abstract [en]

This study investigates auditors’ assessment of the quality of their own audit engagements, utilising survey data gathered from a Big Four audit firm in Sweden. We first examine to what extent auditors’ self-reported audit quality threatening behaviours (AQTBs) in the audit process are reflected in their assessment of overall audit quality (OAQ). The results indicate that AQTBs overall and all individual AQTBs are associated with quality assessment, though with variations in their significances. Second, we examine whether AQTBs and OAQ are associated with an auditor’s stakeholder priority, i.e. which stakeholder the auditor considers as her highest priority in the audit work. We find that auditors who consider the employer as the highest priority report more AQTBs. However, priorities are not related to OAQ. Furthermore, auditors prioritising the client or employer tend to assess the overall audit quality as being higher than what the AQTBs would suggest (i.e. they over-assess the quality). Interestingly, the findings regarding priorities are only evident among partners. In sum, the findings of this study provide important insights on how auditors themselves assess their audit quality, and on the role of auditors’ stakeholder priorities.

Place, publisher, year, edition, pages
Taylor & Francis, 2023
Keywords
audit quality, self-assessment, auditor behaviour, audit process, stakeholder priority
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-189009 (URN)10.1080/00014788.2021.2001638 (DOI)000788917600001 ()2-s2.0-85132653779 (Scopus ID)
Available from: 2021-11-01 Created: 2021-11-01 Last updated: 2023-06-19Bibliographically approved
Annelin, A. & Svanström, T. (2023). Transformation in audit teams: implications for team competence. In: Jan Marton; Fredrik Nilsson; Peter Öhman (Ed.), Auditing transformation: regulation, digitalisation and sustainability (pp. 314-337). London: Routledge
Open this publication in new window or tab >>Transformation in audit teams: implications for team competence
2023 (English)In: Auditing transformation: regulation, digitalisation and sustainability / [ed] Jan Marton; Fredrik Nilsson; Peter Öhman, London: Routledge, 2023, p. 314-337Chapter in book (Refereed)
Abstract [en]

It is noted that the digital transition, sustainability assurance, and reporting and transformation in regulatory requirements are the three key drivers of transitioning audit teams. This chapter provides a literature review of audit team competence through composition, expertise, and dynamics. We have primarily reviewed established auditing journals for relevant articles in the audit team context. As a result, the future of the transformation auditing that audit teams face is conceptualised, and the chapter provides a visual model to highlight these new ideas. Propositions for future research are suggested about audit team competence through a discussion on composition, expertise, and dynamics.

Place, publisher, year, edition, pages
London: Routledge, 2023
Series
Routledge Studies in Accounting ; 50
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-209432 (URN)10.4324/9781003411390-19 (DOI)001213942200017 ()2-s2.0-85170170223 (Scopus ID)9781032533032 (ISBN)9781032533056 (ISBN)9781003411390 (ISBN)
Available from: 2023-06-09 Created: 2023-06-09 Last updated: 2025-04-24Bibliographically approved
Cahan, S. F., Che, L., Knechel, W. R. & Svanström, T. (2022). Do audit teams affect audit production and quality? evidence from audit teams' industry knowledge: [Les équipes d’audit influencent-elles la production et la qualité des audits? Données probantes relatives à la connaissance du secteur qu’ont les équipes d’audit]. Contemporary Accounting Research, 39(4), 2657-2695
Open this publication in new window or tab >>Do audit teams affect audit production and quality? evidence from audit teams' industry knowledge: [Les équipes d’audit influencent-elles la production et la qualité des audits? Données probantes relatives à la connaissance du secteur qu’ont les équipes d’audit]
2022 (English)In: Contemporary Accounting Research, ISSN 0823-9150, E-ISSN 1911-3846, Vol. 39, no 4, p. 2657-2695Article in journal (Refereed) Published
Abstract [en]

We examine how the extent and distribution of industry knowledge within an audit team affect audit outcomes. While prior research examining the role of auditors' industry knowledge focuses mainly on audit firms, audit offices, and audit partners, audits are conducted by audit teams. Using an audit framework and proprietary data from a Big 4 firm that includes audit hours for each team member, we find that Big 4 audit teams with higher average industry knowledge are associated with more audit effort. In contrast, we find mixed evidence on the relation between the average hourly internal cost rate and team knowledge. Further, we find that balanced teams, which have at least one team member who qualifies as an industry specialist at both the senior rank and junior rank, produce higher quality audits than teams that have no specialists. In contrast, the audit quality of unbalanced teams, which have a specialist at the senior rank but not the junior rank or vice versa, is not statistically different than teams with no specialists. Overall, our evidence suggests that both the extent and distribution of industry knowledge within a team matter for audit production and that industry knowledge is utilized more effectively when it is spread throughout the team. The findings have useful implications for audit firms and regulators regarding how team composition and industry knowledge affect audit outcomes.

Abstract [fr]

Nous examinons de quelle façon l’ampleur et la distribution de la connaissance du secteur au seind’une équipe d’audit influencent les résultats des audits. Si la recherche menée jusqu’ici sur le rôle de la connaissance du secteur que possèdent les auditeurs met principalement l’accent sur les cabinets d’audit, les bureaux d’audit et les partenaires d’audit, les audits sont dans les faits menés pardes équipes d’audit. À l’aide d’un cadre d’audit et de données exclusives d’un cabinet du Big 4 qui incluent les heures consacrées à l’audit par chaque membre de l’équipe, nous montrons que les équipes d’audit qui possèdent en moyenne une meilleure connaissance du secteur sont associées à un effort d’audit plus soutenu. Par contre, nous dégageons des éléments de preuve mitigés sur la relation entre le coût horaire interne moyen et la connaissance du secteur que possède l’équipe. Enoutre, nous établissons que les équipes équilibrées, c.-à-d., celles comptant un spécialiste du secteur à l’échelon supérieur et un à l’échelon subalterne, produisent des audits de meilleur equalité que les équipes n’ayant pas de spécialistes. À l’opposé, la qualité des audits effectués pardes équipes non équilibrées, qui ont un spécialiste du secteur à l’échelon supérieur ou subalternen’est pas statistiquement différente de celle des audits des équipes dépourvues de spécialistes. Dans l’ensemble, nos données portent à croire que l’ampleur et la distribution de la connaissance du secteur au sein d’une équipe d’audit sont importantes pour la production d’audits, et que la con-naissance du secteur est utilisée plus efficacement lorsqu’elle est partagée par plusieurs membres de l’équipe. Nos résultats ont des répercussions utiles pour les cabinets d’audit et les organismes de réglementation concernant la façon dont est composée l’équipe et la manière dont la connaissance du secteur influence les résultats des audits.

Place, publisher, year, edition, pages
John Wiley & Sons, 2022
Keywords
audit teams, audit production, audit quality, industry knowledge, team composition, team dynamics, équipes d’audit, production d’un audit, qualité d’un audit, connaissance du secteur, composition d’une équipe, dynamique d’une équipe
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:umu:diva-199363 (URN)10.1111/1911-3846.12807 (DOI)000855720700001 ()2-s2.0-85138961832 (Scopus ID)
Funder
The Jan Wallander and Tom Hedelius Foundation, P2014-0088:1The Jan Wallander and Tom Hedelius Foundation, P2018-0029
Available from: 2022-09-15 Created: 2022-09-15 Last updated: 2022-12-30Bibliographically approved
Sundgren, S. & Svanström, T. (2022). Regulatory sanction risk and going-concern reporting practices: evidence for privately held firms. Accounting and Business Research, 52(4), 377-416
Open this publication in new window or tab >>Regulatory sanction risk and going-concern reporting practices: evidence for privately held firms
2022 (English)In: Accounting and Business Research, ISSN 0001-4788, E-ISSN 2159-4260, Vol. 52, no 4, p. 377-416Article in journal (Refereed) Published
Abstract [en]

We study the temporal evolution of going-concern reporting from 2004 to 2013 and test whether sanction risk is related to the likelihood of a going-concern opinion using samples of privately held firms. In 2009, the Supervisory Board of Public Accountants (SBPA) in Sweden started to issue significantly more going-concern-related disciplinary sanctions, and we test whether and how auditors at different audit firms adjust their reporting practices (Type I and Type II errors) in response to the increased sanction risk. Our findings reveal that auditors are more likely to issue going-concern opinions to bankrupt and non-bankrupt firms when the sanction risk is higher, suggesting that sanction risk is positively associated with conservatism in auditors’ reporting. Furthermore, we find that auditors at Big 4 firms alter their reporting to conservative more than non-Top 7 firms when sanction risk increases. Finally, results on the informativeness of going-concern opinions indicate that a going-concern opinion increases the bankruptcy probability during both the lower and higher sanction risk periods, but the impact is higher under the higher sanction risk period.

Place, publisher, year, edition, pages
Routledge, 2022
Keywords
going concern opinion, regulatory sanction risk, disciplinary sanctions, auditor conservatism, audit firm size
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-183244 (URN)10.1080/00014788.2021.1931799 (DOI)000667526100001 ()2-s2.0-85130949689 (Scopus ID)
Available from: 2021-05-19 Created: 2021-05-19 Last updated: 2022-06-14Bibliographically approved
Annelin, A. & Svanström, T. (2022). The Triggers and Consequences of Audit Team Stress: qualitative evidence from engagement teams. International Journal of Auditing, 26(2), 113-133
Open this publication in new window or tab >>The Triggers and Consequences of Audit Team Stress: qualitative evidence from engagement teams
2022 (English)In: International Journal of Auditing, ISSN 1090-6738, E-ISSN 1099-1123, Vol. 26, no 2, p. 113-133Article in journal (Refereed) Published
Abstract [en]

This study investigates audit team stress, its triggers and consequences to provide qualitative evidence about what audit team stress is and how its triggers and consequences can influence team stress and audit quality. Audit teams in three different audit firms, including different audit team ranks, discussed team stress experiences from one specific engagement during group and individual interviews. Audit work can be stressful, and its consequences can threaten audit quality. Additionally, shared team stress differs from individual personal stress. This research discusses how audit team stress, its triggers and consequences can occur at an interteam stress level, when all team members experience the same stress, and at an intrateam stress level, when individuals feel stress from a team experience. Contributions are made to audit literature and practitioners about audit experiences at a team level and its influence on audit quality, including new insights about time budget pressures and auditor affect.

Place, publisher, year, edition, pages
John Wiley & Sons, 2022
Keywords
audit quality, audit team, interteam stress, intrateam stress, team stress, triggers and consequences
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-161954 (URN)10.1111/ijau.12254 (DOI)000727236600001 ()2-s2.0-85120539087 (Scopus ID)
Funder
The Jan Wallander and Tom Hedelius Foundation, P2014-0088:1The Jan Wallander and Tom Hedelius Foundation, P2018-0029
Note

Previously included in thesis in manuscript form with title: "The Triggers and Consequences of Audit Team Stress". 

Available from: 2019-08-07 Created: 2019-08-07 Last updated: 2022-05-31Bibliographically approved
Che, L., Langli, J. C. & Svanström, T. (2021). Are Audit Partners' Compensation and Audit Quality related to their Consulting Revenues?. Journal of Accounting and Public Policy, 40(6), Article ID 106896.
Open this publication in new window or tab >>Are Audit Partners' Compensation and Audit Quality related to their Consulting Revenues?
2021 (English)In: Journal of Accounting and Public Policy, ISSN 0278-4254, E-ISSN 1873-2070, Vol. 40, no 6, article id 106896Article in journal (Refereed) Published
Abstract [en]

Recent accounting scandals have triggered renewed interest in the debate concerning whether audit firms should be banned from providing consulting services. Compared to the voluminous studies on consulting services to audit clients (i.e., non-audit services, hereafter NAS), little has been done to investigate consulting services to non-audit clients (hereafter CS). This study examines whether audit partners' revenues from CS are associated with: i) partners' compensation, and ii) audit quality (AQ), while controlling for revenues from NAS and auditing. We choose the Norwegian setting because of the unique and proprietary data on CS at the audit partner level. Our results provide initial evidence that partners' compensation is positively associated with their revenues generated from CS. Regarding AQ, our findings indicate no relation between AQ and partners' revenues from CS. This study contributes to the recent debate on multidisciplinary audit firms and should be of interest to regulators, audit firms, and users of audited financial statements.

Place, publisher, year, edition, pages
Elsevier, 2021
Keywords
Consulting services, Non-audit clients, Partner compensation, Audit quality
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-186762 (URN)10.1016/j.jaccpubpol.2021.106896 (DOI)000724523400010 ()2-s2.0-85114729555 (Scopus ID)
Available from: 2021-08-20 Created: 2021-08-20 Last updated: 2023-03-24Bibliographically approved
Svanström, T., Stenheim, T. & Kulset, E. M. (2020). KAM disclosure in the auditor's report: a literature review. In: Tonny Stenhiem, Kari Birkeland (Ed.), Finansiell og ikke-finansiell rapportering: trender og utvikling : festskrift til Hans Robert Schwencke (pp. 357-400). Oslo: Gyldendal Akademisk
Open this publication in new window or tab >>KAM disclosure in the auditor's report: a literature review
2020 (English)In: Finansiell og ikke-finansiell rapportering: trender og utvikling : festskrift til Hans Robert Schwencke / [ed] Tonny Stenhiem, Kari Birkeland, Oslo: Gyldendal Akademisk, 2020, p. 357-400Chapter in book (Refereed)
Place, publisher, year, edition, pages
Oslo: Gyldendal Akademisk, 2020
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-178916 (URN)9788205546325 (ISBN)
Available from: 2021-01-21 Created: 2021-01-21 Last updated: 2021-03-18Bibliographically approved
Bjørndalen, S., Akhtar Larsen, K.-R. & Svanström, T. (2019). Rådgivningstjenester og revisjonskvalitet: en studie av 30 europeiske land. Magma - Tidsskrift for økonomi og ledelse (1), 65-79
Open this publication in new window or tab >>Rådgivningstjenester og revisjonskvalitet: en studie av 30 europeiske land
2019 (Norwegian)In: Magma - Tidsskrift for økonomi og ledelse, ISSN 1500-0788, E-ISSN 1500-6069, no 1, p. 65-79Article in journal (Refereed) Published
Abstract [no]

I denne artikkelen analyserer vi den tiltenkte effekten av revisjonsforordningen om begrensninger i honorar for rådgivningstjenester (537/2014/EU). 37 Den monetære begrensningen på rådgivningstjenester er satt til maksimalt 70 prosent av de siste tre års gjennomsnittlige honorar for lovpålagt revisjon. 38 Vi undersøker hvorvidt målsettingen om økt revisjonskvalitet gjennom reduserte rådgivningstjenester har stadfeste i empiri.

Vi benytter estimerte skjønnsmessige periodiseringer som måleparameter på revisjonskvalitet, ettersom dette er et relevant mål på revisors evne til å begrense ekstreme og opportunistiske regnskapsvalg fra ledelsen (Myers mfl., 2003). For å beregne andelen av estimerte skjønnsmessige periodiseringer har vi benyttet Modified Jones Model, som gjennom empiri har vist seg å være blant de mest anerkjente og brukte som indikasjon på lav regnskapskvalitet (Dechow mfl., 1995). Vi deler inn tre ulike nivåer på estimerte skjønnsmessige periodiseringer: resultatøkende, reduserende og absolutt. Det som skiller denne studien fra tidligere forskning, er blant annet dens rekkevidde. Undersøkelsen gjennomføres for 30 land i Europa, i perioden 2009 til 2015. Som et eksplorativt bidrag deler vi inn i fem ulike strata basert på regnskapsteoretiske likheter mellom nasjonene, og sammenligner mot hovedmodellene. Videre undersøker vi også hvorvidt vårt datasett kan underbygge 70 prosent-grensen på honorar for rådgivningstjenester slik den er fastsatt i revisjonsforordningen.

Vår analyse kan antyde at rådgivningstjenester påvirker revisjonskvalitet negativt. Dette innebærer at en økning i rådgivningstjenester indikerer synkende kvalitet på revisjonen som utføres. Videre kan våre funn tyde på at begrensningen på honorar for rådgivningstjenester antageligvis er satt for høyt.

National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-55078 (URN)
Available from: 2019-03-08 Created: 2019-03-08 Last updated: 2019-03-25Bibliographically approved
Che, L. & Svanström, T. (2019). Team composition and labor allocation in audit teams: a descriptive note. Managerial Auditing Journal, 34(5), 514-544
Open this publication in new window or tab >>Team composition and labor allocation in audit teams: a descriptive note
2019 (English)In: Managerial Auditing Journal, ISSN 0268-6902, E-ISSN 1758-7735, Vol. 34, no 5, p. 514-544Article in journal (Refereed) Published
Abstract [en]

Purpose The purpose of this paper is to describe, illustrate and provide a deeper understanding of team composition and labor allocation in audit teams by quantifying the exact value of resources at different levels of the audit production. Audit teams have been considered as a black box in audit research. Therefore, this paper reports descriptive statistics on (levels and proportions of) hours and costs allocated to auditor ranks (and the number and value, i.e. billing rates, of auditors for different ranks and the entire team) to shed new light on audit teams. Design/methodology/approach This study uses a proprietary data set containing disaggregated information on hours, costs and billing rates for each team member in each of 908 audit engagements. The data are provided by a Swedish Big 4 audit firm. The study uses a purely descriptive approach and categorizes auditors into seven ranks. As size and the publicly listed status are crucial determinants of audit production, the paper splits engagements in public and private companies and reports statistics for size quartiles of both public and private clients. Findings The paper provides descriptive statistics for (1) client size, (2) audit team members, (3) audit hours, (4) audit costs, (5) proportion of audit hours, (6) proportion of audit costs, (7) billing rates and (8) variation of billing rates. Results show that compared to private clients, the audit firm allocates higher effort from auditors in higher ranks and lower effort from auditors in lower ranks to public clients. Another finding is that allocation varies with client size for private clients, but less so for public clients. Originality/value In an area with sparse literature, this descriptive study serves as a first step to improve our understanding and guide future research. It provides concrete support for previously known theory.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2019
Keywords
Team composition, Audit cost, Audit hours, Audit team, Auditor ranks, Labour allocation, Billing rates
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-161481 (URN)10.1108/MAJ-08-2018-1986 (DOI)000471125200001 ()2-s2.0-85066895321 (Scopus ID)
Available from: 2019-07-09 Created: 2019-07-09 Last updated: 2023-03-23Bibliographically approved
Organisations
Identifiers
ORCID iD: ORCID iD iconorcid.org/0000-0002-7099-3429

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