The next best thing: Social presence and accountability's impact on auditor professional skepticism

• Published date: 01 April 2021
• Author: Kate Sorensen,Marc Ortegren
• Date: 01 April 2021
• DOI: http://doi.org/10.1002/jcaf.22484

Received:  September Accepted:  December 

DOI: ./jcaf.

BLIND PEER REVIEW

The next best thing: Social presence and accountability’s

impact on auditor professional skepticism

Kate Sorensen1Marc Ortegren2

School of Accountancy, University of

Memphis, Memphis, Tennessee, USA

School of Accountancy, Southern Illinois

University, Edwardsville, Illinois, USA

Correspondence

KateSorensen, School of Accountancy,

Universityof Memphis, Memphis, Ten-

nessee,USA.

Email:kbsrnsen@memphis.edu

Abstract

Audit fieldwork is shifting from the client site to remote environments due

to generational preferences, budget restrictions, and health mandates as seen

with the COVID- pandemic. This may negatively impact professional skep-

ticism without purposeful safeguards. Based in Social Presence Theory (SPT),

our experiment uses Big  senior auditors to examine how the perceived level of

social presence (high vs. low) influences an auditor’s professionalskepticism and

how increasing one’s feeling of accountability can increase auditor skepticismin

a remote audit environment. Wepredict and find that auditors who feel a greater

degree of social presence with their client are more skeptical. We also find that

increasing an auditor’s feelings of accountability can increase skepticism, and

that increasing accountability in a low social presence environment can mitigate

lower feelings of professional skepticism. This finding offers an effective and effi-

cient method to help auditors remain skeptical in remote audit environments.

KEYWORDS

social presence theory,auditor skepticism, accountability, auditor-client communication, elec-

tronic communication, face-to-face communication

1 INTRODUCTION

Traditionally, audits have been conducted at the client’s

office where face-to-face (FF) communication is the pri-

mary means of communication between client and auditor.

This dynamic is rapidly changing as auditors increasing

rely on computer-mediated communication (CMC) both

with their clients and within their audit teams (Baltes,

et al., ; Brazel et al., ; Teeter et al., ; Bennett

and Hatfield ). This trend likely began in response to

the communication preferences of younger auditors and

in an attempt to decrease the social mismatch between

staff auditors and older, more experienced client employ-

ees (Bennett & Hatfield, ;). It is also driven by

changing workplace environments and cost-cutting ini-

tiatives (Raphael ). Additionally, the COVID- out-

break of  forced companies, including the Big  firms,

to allow associates to work from home (Bramwell a,

b). This change deserves attention as the results and

overall quality of the financial statement audit result from

the interactions and communications between the audit

client (management) and the audit staff (staff, seniors,

managers, and partners) (Pentland ; Gibbins, Salte-

rio, and Webb ;Shaub; Arel, Brody, and Pany

). The goal of this research is to examine the impact

of CMC versus FF communication on professional skep-

ticism and offer a potential intervention (increased feelings

of accountability) to increase professional skepticism in a

remote environment.

Through partner interviews, previous research has

found that firms are aware of this change and concerned

about the heavy reliance that staff-level auditors place on

CMC and their preference for CMC over FF methods

of communication (Westermann, Bedard, and Early ;

J Corp Account Finance. ;:–. ©  Wiley PeriodicalsLLC39wileyonlinelibrary.com/journal/jcaf