Determining overall group materiality and materiality levels for individual components is becoming more of a hot-button issue as the number and complexity of large and international group audits increases. Auditing standards and other professional materials offer little practical guidance on the...

This paper examines the effects of internal audit sourcing arrangement on the external auditor's reliance decision in the presence of different levels of inherent risk and task subjectivity. We posit that external auditors will rely more on outsourced than in-house internal audit functions...

This paper examines the effects of internal audit sourcing arrangement on the external auditor's reliance decision in the presence of different levels of inherent risk and task subjectivity. We posit that external auditors will rely more on outsourced than in-house internal audit functions...

The Sarbanes-Oxley Act of 2002 (SOX) established the Public Company Accounting Oversight Board (PCAOB) to oversee the public accounting firms that audit publicly traded companies in the U.S. In this commentary we outline why we believe the PCAOB's audit standard setting and inspection models are...

According to the internal control and auditing literatures, “tone at the top” plays an important role in entities' internal control over financial reporting (ICFR) and in auditors' planning and risk assessment decisions. We offer new insights on the relation between tone at the top and audit...

While high-quality relationships among employees yield many benefits to organizations, they may have unintended consequences for whistleblowing. In a first experiment, we investigate whether high-quality employee-supervisor relationships reduce employees’ willingness to report supervisor...

Using unique survey data from Great Place to Work® Institute, we investigate the association of intra-organizational trust (i.e., employees' trust in management) with three aspects of financial reporting: accruals quality, misstatements, and internal control quality. We find that trust is...