The Effect of Time Pressure on Professional Skepticism Levels Exhibited by Student Auditors

Holstrom, Taylor

Publication

The Effect of Time Pressure on Professional Skepticism Levels Exhibited by Student Auditors

Holstrom, Taylor

Date

2015

Additional date(s)

2015-05-01

Abstract

Audits provide the capital market with a foundation of financial assurance. Regulatorsand researchers believe that professional skepticism contributes to quality auditing (PCAOB 2012a). Therefore, in order to create high-quality audits, it is important to understand the factors that influence professional skepticism. One of those factors, time pressure, is prevalent to all auditors of public companies. Prior research suggests that time pressure can have a positive influence on audit quality (e.g., Glover 1997; Robison et al. 2013), while others suggest that it can have a negative influence on audit quality (McDaniel 1990; Coram 2004). In my experiment using student auditors, this study examines the influence that time pressure has on levels of state professional skepticism. Additionally, I offer supplemental analysis regarding the effect of time pressure on levels of trait professional skepticism. I find that time pressure has an inconclusive effect on state professional skepticism, but it has a negative effect on levels of trait professional skepticism. I also offer conclusions and implications for standards-setters and audit firms.