Alumni Newsletter Fall 2021

Hokies Win Four Highly Competitive Grants from the Center for Audit Quality

The purpose of the Center for Audit Quality (CAQ) is to enhance investor confidence and public trust in the global capital markets by fostering high-quality performance by public company auditors. One way that the CAQ meets its objective is through its Access to Audit Personnel Grant program. This grant program seeks to provide researchers with access to audit staff to support high- quality audit research. The grant program is highly selective, with only a few grant proposals being selected each year for funding. Ph.D. students Carissa Malone and Karneisha Wolfe each won a highly competitive CAQ Access to Audit Personnel Grant with their respective papers! Their advisor, Dr. Sudip Bhattacharjee, states that “This is a highly competitive grant and it is quite unusual for multiple doctoral students from the same PhD institution to be part of the winning team on separate grants.” Dr. Kimberly Walker won a third CAQ Access grant as well. Dr. Sarah Stein added, “It’s

incredible that 3 of the 5 grant recipients include our Hokies.” However, our Hokies were not done yet. The CAQ, through its Research Advisory Board (RAB), annually awards grants to fund auditing-related scholarly academic research that can have important, real-world impact on audit quality and the future of auditing. The RAB is comprised of representatives from academia and the profession. The grant program is highly selective, with only a few grant proposals being selected each year for funding. During the RAB 2021 grant cycle, the only proposal funded was coauthored by Dr. Lauren Cunningham from the University of Tennessee along with Dr. Sarah Stein, Dr. Kimberly Walker, and Karneisha Wolfe, all from Virginia Tech. During 2021, a total of four ACIS faculty and two ACIS Ph.D. students won four CAQ grants. Go Hokies!

THEWINNING PROPOSALS

Auditing from a Distance: The Impact of Remote Auditing and Supervisor Monitoring on Analytical Procedures Judgments Team: Carissa Malone, Sean Hillison, and Sudip Bhattacharjee all from Virginia Tech Grant: CAQ Access to Audit Personnel Grant This study takes a first step towards understanding how factors related to remote auditing influence auditors’ performance. Specifically, this research examines how working away from client headquarters influences audit quality. Even before the pandemic, advances in technology, including video conferencing, cloud storage, and data-sharing platforms, enabled financial statement auditors to perform significant portions of audit work remotely. Accounting firms have embraced remote auditing, with the expectation that working away from a client’s office (e.g., home and audit firm office) can translate to efficiencies, cost savings, and staffing flexibility as audit work can be more easily performed at firms’ offices or other locations away from a client’s site. However, there are concerns that remote auditing may decrease audit quality due to diminished interactions between auditors and clients and challenges with audit supervision. In a bid to address these concerns with auditor-client relationships, firms have instituted policies where supervisors more regularly monitor or request status updates from remote auditors about the engagement’s progress. This study examines how these two remote auditing factors: the auditor’s work location (i.e., whether the auditor works remotely or at the client’s headquarters) and the frequency of the supervisor’s status update request influence auditors’ judgments. Dr. Hillison states, “We are thankful for the CAQ’s support of our research. Our research team started this project prior to the pandemic, and obviously working remotely has become more prevalent since then. It has been an exciting project to work on as our findings can have immediate implications for audit firms and auditors. We find some promising preliminary results that suggest auditors think more broadly and perform better when working remotely away from client headquarters and are monitored on a less frequent basis. Audit supervisors may consider delicately balancing the frequency of monitoring of remote workers to allow for the benefits of remote auditing to manifest.” https://www.thecaq.org/access-audit-personnel-grant-recipients/

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