An Empirical Study of the Conflicting Pressures on Auditor Decision-Making, and Implications for Auditor Independence

AN EMPIRICAL STUDY OF THE COMPLEX INTERPLAY OF CONFLICTING PRESSURES ON AUDITOR DECISIONMAKING,
AND THE IMPLICATIONS FOR AUDITOR INDEPENDENCE
BACKGROUND
Recent high profile corporate collapses have precipitated several lines of inquiry into the financial audit
model and the regulation surrounding it in the UK.
Academic studies have focused on the audit quality impact of various regulations aimed at ensuring
auditor independence. However, these have used poor proxies of audit quality, which also do not
separate the impact of auditor independence.
The literature refers to the main risks to auditor independence. However, while empirical studies have
confirmed the existence of these risks from studying firm cultures, they have not gathered evidence on
the impact of these on actual contextual auditor decision-making, and in the presence of regulations and
ethical codes of conduct aimed at countering the effect of such commercial pressures.
PURPOSE STATEMENT
The aim of the study, therefore, is to gather empirical evidence from UK auditors on how key audit
decisions are made in the presence of conflicting pressures on the auditor.
The results of the study are intended to develop the theory on auditor independence, to set the
groundwork for quantitative studies, and ultimately, to guide future policy on UK audit regulation.
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MAIN RESEARCH QUESTION
v How do various conflicting factors impact auditor decision-making and therefore audit rigour?
DESIGN OVERVIEW
A qualitative approach will be used based on semi-structured interviews.