Using more effective instructional verbs to elevate auditors' professional scepticism

Abstract

We investigate whether using different instructional verbs to codify requirements in auditing standards, and to direct auditors in meeting those requirements, impacts the level of professional scepticism reflected in auditor judgments and the evidence auditors intend to collect. In an experiment, with practicing auditors serving as participants, we test whether directing auditors with higher order instructional verbs (e.g., consider and evaluate), rather than with lower order instructional verbs that are currently employed (e.g., review and identify), elevates auditors' professional scepticism. We investigate the level of professional scepticism reflected in two auditor judgments and the evidence that auditors intend to collect. Although we find that different instructional verbs did not have an effect on the level of scepticism reflected in auditor judgments, the use of higher order instructional verbs did elevate the level of scepticism reflected in the evidence auditors intend to collect. Our finding has important implications for the way in which auditing standards are drafted and the way in which auditors are guided by written instructions.

Audit evidence, technology, and judgement: A review of the literature in response to ED‐500

“…The study also suggests that measures taken by audit firms to enhance professional skepticism are more effective for industry specialists, as nonexperts in a particular are tend to be skeptical regardless of these efforts. Stepankova et al (2022) examine whether prompts vis-à-vis higher-order instructional verbs (e.g., consider and evaluate) versus lower-order instructional verbs (e.g., review and identify) in auditing standards could induce greater auditor professional skepticism and enhanced audit evidence collection. In an experiment with 48 practicing auditors from Australia the results suggest that higher order instructional verbs did not influence the level of skepticism reflected in auditor judgments, the use of higher order instructional verbs did not increase either measure of professional skepticism (comfort in management representations and evidence persuasiveness) but did influence the perceived amount of planned audit evidence.…”

“…Some studies suggest that abstract thought can increase skepticism when evaluating complex audit evidence, while graphical evidence can increase skepticism when thinking more concretely (Backof et al, 2018; Rasso, 2015). Others find that the effectiveness of skepticism prompts, for example, may be a limited, context‐specific intervention (Backof et al, 2018; Peytcheva, 2014; Rasso, 2015; Stepankova et al, 2022).…”

Comments of the AFAANZ Auditing and Assurance Standards Committee on the Proposed Standard on Assurance Engagements over GHG Emissions Disclosure

“…Different terminology will lead to different actions on the part of assurance practitioners and different interpretations by users. There is evidence in a different context, the choice of audit procedures, that different verbs used in auditing standards, such as assure, verify and validate make a difference to their understanding by readers (Stepankova et al, 2022). Harding et al (2023) also find that users perceive different meanings from an auditor's report when different, but equivalent, standards are referred to in the report.…”

“…Harding et al (2023) also find that users perceive different meanings from an auditor's report when different, but equivalent, standards are referred to in the report. Moreover, different verbs (e.g., validate, verify, assure) are associated with different levels of thinking (Stepankova et al, 2022) meaning that variation in terminology may lead to real and not just perceived differences in the level of assurance provided.…”

Comments of the AFAANZ Auditing and Assurance Standards Committee on Proposed International Standard on Auditing 500 (Revised) Audit Evidence

“…With reference to the work-effort verbs employed to prescribe requirements, we note research that different instructional verbs can impact an auditor's judgement processes (Stepankova et al, 2022) and the spectrum of work effort implied by different verbs as outlined in the IAASB Drafting Principles and Guidelines.…”