The effect of off-site audit work on the judgment quality and development of staff auditors
This study experimentally examines the effects of recent increases in off-site audit work (e.g., task-specific experience and social environment) on the judgment quality and development of staff auditors. First, I examine how preparing testwork (i.e. task-specific experience) affects the subsequent performance of staff auditors’ workpaper review. Second, I consider how the physical presence or absence (i.e., social environment) of a high-ranking auditor affects the judgment quality of staff auditors. I provide evidence that staff auditors, who have the opportunity to prepare basic audit tasks prior to reviewing workpapers, identify more mechanical seeded errors than auditors who only review workpapers. Further, I find that the presence of a high-ranking auditor improves the performance of staff auditors in completing a subsequent workpaper review task, especially when the participants prepare testwork prior to reviewing workpapers. The results of this study highlight the practical implications of the current audit environment; as well as contributing to the emerging literature examining off-site audit work.