Professional skepticism for green reputation clients: A mixed method study of technology enabled audits

Abstract

The research investigated auditor’s Professional Skepticism (PS) mindset while auditing the “integrated financial statement” of green reputation clients in a technology enabled audit environment. The study tries to understand the difference in thought and action of auditors based on perception of their client as sustainability responsible or not. Subsequently, the study offers meaningful insights about the nuances that upholds this distinction. This research comprises two studies using the mixed method procedure as per Creswell and Clark (2017). The first study is a 2 x 2 between subject experiment. The second study uses the Theories in Use (TiU) methodology by analyzing qualitative interviews of practicing auditors in an emerging market setting. The findings of study 1 (comprising the experiment) highlight that auditors are more professionally skeptical while auditing clients with a green reputation. Study 2 (utilizing qualitative interviews) points out that technology assists the PS mindset by enhancing the audit effectiveness and audit efficiency of green client’s audit. The study offers an in-depth understanding of the level of auditor’s PS mindset toward clients with a green reputation, and therefore demystifies the inherent forces at play during such a phenomenon. Although the setting of the study is an emerging market, the study offers transferable findings to improve the overall understanding of auditor’s mindset. The study has implications for multiple actors engaged in the audit process, viz., auditors, audit firms, regulator of the audit profession, audit committees, academia, and policy makers.

Supply chain driven herding behavior during COVID-19: evidence of interdependence from India

“…We examined the impact of supply chain disruptions on herding behavior, which might be caused by information asymmetry, fear, uncertainty, supplier and customer relationships and lack of alternative strategies (Scheibe and Blackhurst, 2018). The firms tried to tie over the COVID-19 down market as reflected in their audited quarterly performance endorsed by auditors using digital technologies for high-reputation clients (Varma et al , 2023).…”