The effect of the linguistic concreteness of language on auditors’ professional scepticism

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Copyright: Stepankova, Sarka
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Abstract
Professional scepticism is a central focus of the audit profession and a key determinant of audit quality. Audit research and standard setters have recently raised concerns that the current wording of audit standards may not be effective in inducing auditors to exercise sufficient levels of professional scepticism. This study experimentally tests whether using verbs suggested to encourage more thoughtful information processing (i.e. linguistically less concrete verbs) in audit instructions affects auditors’ mindset and attitudes and thus their levels of professional scepticism. It draws on construal level theory, mindset theory, and prior linguistic research to develop its expectations that auditors instructed with linguistically less concrete verbs will adopt a more sceptical mindset and form more sceptical attitudes towards audit evidence and management’s assertions relative to auditors instructed with linguistically more concrete verbs as currently used in audit standards. Forty-eight experienced auditors from Big 4 Australian accounting firms participated in this 2 x 1 controlled experiment where the level of linguistic concreteness of verbs was manipulated between subjects at two levels: ‘linguistically more concrete verbs’ versus ‘linguistically less concrete verbs’. The results of the study show that using linguistically less concrete verbs in audit instructions affects auditors’ cognitive processing and leads to a greater breadth of information selection (mindset). However, the findings do not show that linguistically less concrete verbs influence auditors’ beliefs regarding the sufficiency of audit evidence and their feelings of comfort with respect to management’s assertions (attitudes). The study responds to the call for research by Nolder and Kadous (2018) to explore whether revising language (verbs) in audit instructions leads to the adoption of a more sceptical mindset and provides empirical evidence on their model of professional scepticism.
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Author(s)
Stepankova, Sarka
Supervisor(s)
Mayorga, Diane
Trotman, Ken
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Publication Year
2019
Resource Type
Thesis
Degree Type
Masters Thesis
UNSW Faculty
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