Twenty-Five-Year Overview of Experimental Auditing

Research: Trends and Links to Audit Quality

Roger Simnett, Ken T. Trotman

Tugas Mata Kuliah Auditing (Seminar)

Dosen Pengampuh : Dr. Sc. Damai Nasution SE., M.Si., Ak

Oleh
Lucky Maharani Safitri
041924253002 / A2P

PROGRAM STUDI MAGISTER AKUNTANSI

FAKULTAS EKONOMI DAN BISNIS
UNIVERSITAS AIRLANGGA
SURABAYA
2020
 RESEARCH SUMMARY

Title:
Twenty-Five-Year Overview of Experimental Auditing Research: Trends and Links to Audit
Quality
Author:
Author 1: Roger Simnett
Author 2: Ken T. Trotman
Volume:
Volume 30 No. 2, 2018
Journal:
Journal of American Accounting Association
Publisher:
American Accounting Association
Article Citation:
Simnett, R. and Trotman K.T. (2018). Twenty-Five-Year Overview of Experimental Auditing
Research: Trends and Links to Audit Quality. Behavioral Research in Accounting, 30 (2), 55-
76.

Research Question
How about an overview of experimental auditing research in twenty-five-years ?

Research Motivation
 To identify trends in the publication of experimental auditing research in ten leading
international accounting journals.
 To map the experimental auditing research undertaken from 1991–2015 to the IAASB’s
(2014) Framework
 To document the trends of this JDM audit research by examining how the issues
examined

Research Method
Most JDM research in auditing uses experimental methods and our paper provides a 25-year
overview that identifies trends in this research (which we label as ‘‘experimental auditing
research’’).

Sample, Definition, and Procedure

Our review of experimental auditing research encompasses papers published during the
period 1991–2015 in the following ten journals: Accounting, Organizations and Society
(AOS); Auditing: A Journal of Practice & Theory (AJPT); Behavioral Research in
Accounting (BRIA); Contemporary Accounting Research (CAR); European Accounting
Review (EAR); Journal of Accounting and Public Policy (JAPP); Journal of Accounting &
Economics (JAE); Journal of Accounting Research (JAR); Review of Accounting Studies
(RAST); and The Accounting Review (TAR). Within this JDM audit research we identify
experimental auditing (and assurance) papers using the following definition and criteria.
Experiment is defined as ‘‘a scientific investigation in which an investigator manipulates and
controls one or more independent variables and observes the dependent variables or variables
for variation concomitant to the manipulation of the independent variables.

Trends in Publications
Year and Journal
Across the 25-year period, 468 experimental auditing papers (6.7 percent) were published
out of 6,991 papers. In total across the five-year period there is a clear trend of a drop in the
percentage of experimental auditing papers (8.8 percent, 8.1 percent in 1991–1995 and 1996–
2000 respectively) compared to the later years (6.0 percent, 5.7 percent, and 5.8 percent
across the latter 15 years). The number of experimental auditing papers in 2011–2015 (108)
is actually higher than in 1991–1995 (100) but the percentage is lower (5.8 percent compared
to 8.8 percent).
What are the potential reasons for the overall drop in percentages of experimental
auditing papers published across the 25-year period? The following suggestions are
speculative but have evolved over time based on anecdotal evidence and informal discussions
with many colleagues. While there are exceptions, experimental auditing researchers come
from two categories of researchers: (1) those that want to do audit research and choose
experimental research over archival methods; or (2) an experimental researcher who chooses
to conduct auditing research over financial/managerial research.
THE IAASB’S FRAMEWORK FOR AUDIT QUALITY AND HOW RESEARCH HAS
INFORMED OUR KNOWLEDGE OF THE FRAMEWORK ELEMENTS

The IAASB’s Framework for Audit Quality

The objectives of the IAASB’s (2014) ‘‘Framework for Audit Quality: Key Elements that
Create an Environment for Audit Quality,’’ as described by the IAASB, are:
 ‘‘raising awareness of the key elements of audit quality;
 encouraging key stakeholders to explore ways to improve audit quality; and
 facilitating greater dialogue between key stakeholders on the topic.’’ (IAASB 2014, 3)
The IAASB’s Framework describes three different elements (Inputs, Processing, and
Outputs) that create an environment for audit quality (at the engagement, firm, and national
levels) together with the relevant interactions and contextual factors.

What Elements of the Framework Have Been Examined?

Inputs/Processing/Outputs
For each of the inputs, processing, and outputs stages, the IAASB’s (2014) Framework
outlines audit quality consideration at each of the engagement, firm, and national levels.

TRENDS IN RESEARCH TOPICS ADDRESSED

Alternative Framework—Reference to Auditing Standards
A further interesting finding is that there is very little experimental research on the
broader ISAE (or national equivalent) assurance standards (only two instances over the 25
years) or the ISRE (or national equivalent) review standards (only one instance over the 25
years).

HOW HAS THE RESEARCH EVOLVED OVER TIME?

Two key issues: the type of participants included in the experiments and the experimental
control including the approach to distributing research instruments.
 Experiment Participants
 Controlled Versus Non-Controlled Experiments
 Interactions among Participant Types, Countries of Participants, and Experimental
Conditions
 RESULT
We find that experimental audit researchers tend to motivate their research around
practical issues and auditing standards and make much more frequent reference to auditing
standards than do archival researchers, and thus may have a much greater impact on the
standard-setting process, one important part of the overall audit quality process. We further
find that the experimental audit research in the last ten years now informs a greater array of
the audit process, with a much greater recent emphasis on the output stage of the process
(especially important as the standard-setters and regulators work through suggested changes,
and possible further adaptations to the auditor reporting suite of standards). However, our
overall conclusion is that, at a time where it appears to be a greater demand for research that
informs practice, regulators, and standard-setters, there is a relative move away from
conducting experimental auditing research towards predominantly conducting archival
auditing research, and also less emphasis on addressing issues that require experienced
participants. This has been potentially caused by a lack of available audit qualified
participants and a consequent move by researchers away from experimental research to
archival research, and/or a move by researchers to other areas of experimental accounting
research (such as management or financial) where there is less of an expectation of the need
for experienced participants.

CONCLUSION
We find a clear trend in that while the number of papers published in the leading journals
has increased, experimental auditing papers have not. Also, as a percentage of total audit
research, experimental papers have decreased. This is due to the increase in publicly available
data for archival research and the decrease in available audit participants. There are many
potential reasons for the latter, but a key reason appears to revolve around what can be
expected from a single research study. Historically, JDM research has built on previous
research papers that is also typical of many other disciplines including psychology and
medicine. More recently, we see an expectation of a greater incremental contribution over
previous research. This is partly due to the scarcity of journal space, but we suggest there is
still a need to examine the boundary conditions of the results for earlier papers.
Further research needs to consider why it is more difficult to obtain participants in an era
where audit firms are under increased scrutiny from regulators for audit deficiencies. We see
a ‘‘Catch 22’’ situation where as audit practitioners become more difficult to access for
experiments, audit researchers move to topics requiring less senior auditors and surrogates for
auditing (online and student surrogates). This research is seen as less informative to audit
firms, standard-setters, and regulators, and that, longer-term, will negatively affect the type of
audit research conducted.