Financial statement comparability enables weighing the similarities and differences in financial performance between firms. Prior studies mainly focus on the role of accounting standards in the production of comparability, but the role of economic agents has been largely overlooked. We find that a firm's audit committee size and financial expertise affect its financial statement comparability. Financial information tends to be more comparable among industry peers when audit committees are larger and more members have financial and accounting expertise. The effect of audit committee expertise on comparability is stronger for firms with less independent and smaller boards, for firms with non-Big 4 auditors and for firms with CEOs serving as the chairperson of the boards.

This study investigates the impact of audit partner rotation on audit quality and whether industry specialisation moderates such a relationship. The results of this study show that audit partner rotation can enhance audit quality but only when both the incoming audit partner and the audit firm are industry specialists. The results of the study provide valuable insights into the effectiveness of audit partner rotation and auditor industry specialisation practices, and their impact on audit quality. The results have implications for the profession as well as regulators regarding audit partner and audit firm industry specialisation. This is the first study to examine the moderating effect of industry specialisation on the auditor rotation-audit quality relationship at the partner level. The introduction of industry specialisation as a moderating factor provides additional insights into the auditor rotation-audit quality relationship at the partner level.

We examine whether ethnicity influences the ethical evaluation of an auditor's willingness (or unwillingness) to engage in whistleblowing. Utilising the concepts of ethnic identity and construal of self, we asked Kenyan auditors to assess an ethical dilemma in which auditors and wrongdoers belong to the same or a different ethnic group. We found that ethnic identity has no significant effect on an auditor's ethical evaluation of remaining silent if both the wrongdoer and potential whistleblower are from the same ethnic group. However, there is a significant effect on the ethical evaluation of whistleblowing if the wrongdoer is from a different ethnic group. We found that auditors with an interdependent construal of self are more likely to perceive as ethical the decision to remain silent if the wrongdoer is a member of their own ethnic group, but this finding did not hold when the wrongdoer is from a different ethnic group.

Purpose This study aims to examine whether accountability and culture have an impact on auditors’ professional scepticism. It also examines whether culture moderates the effect of accountability on auditors’ professional scepticism. Design/methodology/approach Three of the Big 4 firms in Australia and Egypt participated in an audit judgement experiment, which required them to indicate their beliefs about the risk of fraud and error at the planning stage of a hypothetical audit and evaluate the truthfulness of explanations provided by the client management. The authors examined whether their professional scepticism was influenced by accountability. Findings The results indicate professional scepticism differs significantly between cultures in some situations. The fact that culture influences scepticism suggests that even when auditors use the same standards (such as ISA 240 and ISA 600), they are likely to be applied inconsistently, even within the same firm. The authors, therefore, recommend that international bodies issue additional guidance on cultural values and consider these cultural differences when designing or adopting auditing standards. Originality/value To the best of the authors’ knowledge, this is the first study that examines whether culture moderates the impact of accountability on auditors’ professional scepticism using Egyptian and Australian (Middle Eastern and Western) auditors. Prior literature suggests that individuals subject to accountability pressure increase their cognitive effort and vigilance to detect fraud and error. As the authors find evidence that culture moderates accountability pressure and as accountability affects scepticism, they add to the literature suggesting that culture can influence professional scepticism.

This paper examines how industry specialization and the size of the client affect time pressure to complete an audit. The study used a sample size of 70 auditors to examine their perceptions of time pressure in different scenarios. The results of the experiment demonstrate that industry specialization significantly reduces the level of time pressure, indicating that industry specialist auditors work more efficiently and face less time pressure compared with non-specialist auditors. No significant relationship exists between the size of the client and time pressure, indicating that audit firms are likely to possess stronger bargaining power and resist pressure from clients to reduce audit hours when auditing large companies