Auditors’ scepticism in response to audit committee oversight behaviour

Sanaz Aghazadeh, Yoon Ju Kang and Marietta Peytcheva

Accounting and Finance, 2023, vol. 63, issue 2, 2013-2034

Abstract: We use two experiments and a survey to examine how audit committee (hereafter, AC) oversight behaviour, particularly AC sceptical attitude and proactive behaviour, affects auditor scepticism, and whether the influence is driven by the risk aspect of auditors’ assessment of AC oversight behaviour. We find that when ACs exercise insufficient scepticism, auditors (junior auditors, managers, and partners) perceive AC oversight as weak, and increase their scepticism. However, AC proactive behaviour does not significantly influence auditor scepticism. Our findings suggest auditors view weak AC oversight as a risk indicator and respond by exercising greater scepticism.

Date: 2023
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