Establishing a baseline for assessing the frequency of auditors' comments concerning perceived client integrity

Purpose – The purpose of this paper is to examine whether comments made by Big‐Six auditors about their post‐audit perceptions of the client's integrity were influenced by their firm's rating of the client's integrity prior to the start of the current audit. Design/methodology/approach – The paper uses an established fraud detection case study with a manipulation of client integrity. The participants include 152 managers and 342 seniors from five of the then Big‐Six firms. Findings – The findings indicates that auditors were insensitive to client integrity ratings in the audit planning/risk assessment stage of the audit. Practical implications – The very foundation of corporate governance and the value of the audit are weakened when client integrity is questionable and may not result in implementing more rigorous audit procedures suggested by Mautz and Sharaf. Originality/value – The existent literature cannot be used to determine whether or not Auditing Standards enacted since 1991 have had any effect on the practice of auditing in this area. Consequently, this paper contributes to the literature by establishing a 1991 (i.e. before Statement of Auditing Standards 82) baseline for evaluation purposes. (A baseline being a point of reference to compare the results of future research.)