Professional sceptisicm of auditors : a cross-cultural experiment

Abstract

With the growth in multinational business operations and greater use of international sources of finance, there has been a trend to increased uniformity in accounting and auditing standards. However, uniformity in auditing also requires uniformity in the application of those standards. This paper examines the potential for differences in application of auditing standards due to the influence of cultural differences influencing decision-making by auditors. This study examines the effect of culture, the risk of fraud and errors, accountability and audit knowledge on auditors' professional scepticism, which is necessary to assess the risk of material misstatements due to fraud and error. Information from a sample of 269 junior and senior auditors from three accounting firms from Egypt and Australia were collected. The subjects evaluated the risk of fraud and error at the planning stage. The results provide evidence as to whether auditors from different cultural backgrounds react differently to audit evidence. The results show that there are significant differences between the two countries with respect to some audit decisions but not in others.

Date of Award	2010
Original language	English