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Although skepticism is widely viewed as essential to audit quality, there is a debate about what form is optimal. The two prevailing perspectives that have surfaced are “neutrality” and “presumptive doubt.” With neutrality, auditors neither believe nor disbelieve client management. With presumptive doubt, auditors assume some level of dishonesty by management, unless evidence indicates otherwise. The purpose of this study is to examine which of these perspectives is most descriptive of auditors’ skeptical judgments and decisions, in higher and lower control environment risk settings. This issue is important, since there is a lack of empirical evidence as to which perspective is optimal in addressing client risks. An experimental study is conducted involving a sample of 96 auditors from one of the Big 4 auditing firms in the Netherlands, with experience ranging from senior to partner. One of the skepticism measures is reflective of neutrality, the Hurtt Professional Skepticism Scale (HPSS), whereas the other reflects presumptive doubt, the inverse of the Rotter Interpersonal Trust Scale (RIT). The findings suggest that the presumptive doubt perspective of professional skepticism is more predictive of auditor skeptical judgments and decisions than neutrality, particularly in higher‐risk settings. Since auditing standards prescribe greater skepticism in higher‐risk settings, the findings support the appropriateness of a presumptive doubt perspective and have important implications for auditor recruitment and training, guidance in audit tools, and future research.

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The audit risk model has become an extremely important element in audit practice. The basic intuition behind the model is that changes in risk should affect the work of the auditor. However, little systematic empirical evidence has been published on the assessment of audit risk and its effect on audit work. This study, using documentation from actual audits and follow-up interviews, provides such evidence. Assessments of audit risk and audit programme details have been obtained from eight clients of four Dutch audit firms. Audit risk assessments are obtained for two risk categories: (1) audit risk factors, such as the degree of client management turnover or the quality of the client's internal audit department; and (2) audit risk model variables (inherent or control risk), related to the account or assertion being audited. The results indicate that there is substantial variation in audit risk factors between clients and among the audit risk factors per client. To a lesser extent these findings hold for the risk model variables. The study also indicates that to some degree there is risk variation over time. Variability of risk factor assess-ments over time is higher than variability of risk model variable assessments over time. Audit programmes differ substantially between clients and, to a lesser extent, over time. Interestingly, the only two engagements with a change in the audit programme were the clients with most risk factor changes. The study also identifies factors other than risk, such as a change in the audit team, that influence audit programme planning. The observation in Dutch audit practice of variation in both risk assessments and audit programmes highlights the opportunity to design risk-adjusted audits, which are both efficient and effective. In addition, this observation encourages the carrying out of further research to fine-tune our models concerning which factors are most important within the audit risk model and to the audit planning process.

Auditing is claimed to have become more and more a global discipline. As a result of the expansion of the international audit firm networks, and the proliferation of International Standards on Auditing, differences between national auditing practices seem to have diminished. Surprisingly, national audit research communities seem to develop rather independently, suggesting that national institutions still play an important role in the production of audit research. Therefore, the objective of this paper is to assess the effects of local institutions on audit research. To that end, evidence is provided on the production of audit research in two areas: Europe and North America. Europe is an area with high variation in auditing institutions, while North America is an area with low variation in auditing institutions. A content analysis is presented of the European and North American auditing papers published in accounting and auditing research journals in the period 1990-7. The findings of the output assessment show that, compared to North American audit research, descriptions of national auditing institutions and environments are a dominant topic of European auditing papers, and that the output in terms of journal articles is lower. Subsequently, the paper attempts to explain why the assessed European and North American auditing research differs. The paper argues that the substantial differences in national institutional environments within Europe have two effects on European auditing research. On the one hand, national differences in auditing institutions and environments are an important subject of study. On the other hand, these differences result in a segmentation of the European audit research market, which is lacking in the North American market. The existence of a large number of smaller national auditing research markets results in different incentives, output and performance measures of auditing researchers. The paper concludes with an assessment of the future of audit research as a global discipline.