Researchers Examine Perceptions of Auditors’ Reports

Two Fogelman College researchers are part of a team selected by the Auditing Standards Board of the American Institute of Certified Public Accountants and the International Auditing and Assurance Standards Board to conduct an international auditing study. The study has the objective of identifying and providing insight on the nature and underlying causes of user perceptions regarding the financial statement audit and the unqualified auditors’ report among various classes of financial statement and audit report users.

Specifically, the project is directed at identifying the level of assurance users believe to exist under present auditing standards and the current form of unqualified auditors’ report, and the underlying basis for those beliefs. Additional investigation by the team will focus on the important question of which identified misperceptions actually impact the judgments of financial statement users.

Charles D. Bailey, Arthur Andersen Chair of Excellence and Professor of Accountancy (cdbailey2@memphis.edu) and Jerry L. Turner, Associate Professor of Accountancy are the Fogelman College researchers who are part of the five-person team. In addition to professors Bailey and Turner, the team includes members from the University of Southern California, California State University at Northridge, and the University of Melbourne, Australia. The study will be conducted both in the United States and in Australia and a final report is expected by fall 2008.