Auditor Underreporting and Premature Sign-off: A Behavioural Study

Abstract

This study examined the potential for auditors to underreport the time spent on an audit task or to underaudit when encountering time-budget pressures. The sample includes 152 managers and 342 seniors who responded to a vignette in which auditor history and an audit’s time-budget status were manipulated. The results indicate that underreporting is still a problem that may occur in over 67 per cent of the overtime situations. The research indicates that auditors with a history of time-budget problems are more likely to underreport but not to sign off prematurely.