Integration of Internal Control and Financial Statement Audits: Are Two Audits Better than One?

Lori Shefchik Bhaskar

Joseph H. Schroeder

Marcy L. Shepardson

Indiana University

Abstract：

The quality of financial statement (FS) audits integrated with audits of internal controls over financial reporting (ICFR) depends upon the quality of ICFR information used in, and its integration into, FS audits. Recent research and PCAOB inspections find auditors underreport existing ICFR weaknesses and perform insufficient testing to address identified risks, suggesting integrated audits—in which substantial ICFR testing is required—may result in lower FS audit quality than FS-only audits. We compare a 2007–2013 sample of small U.S. public company firm-years receiving integrated audits (accelerated filers) to firm-years receiving FS-only audits (non-accelerated filers) and find integrated audits are associated with higher likelihood of material misstatements and discretionary accruals, consistent with lower FS audit quality. We also find evidence of (1) auditor judgment-based integration issues, and (2) low-quality ICFR audits harming FS audit quality. Overall, results suggest an important potential consequence of integrated audits is lower FS audit quality.

摘要：

财务报表审计(FS)与财务报告内部控制审计(ICFR)的整合质量取决于财务报表审计中使用的ICFR的信息质量以及两者之间的整合。最近的研究和PCAOB检查发现，审计师低估现有的ICFR缺陷并且没有执行足够的测试来解决已识别的风险，这表明整合审计(需要大量的ICFR测试)可能导致FS审计质量低于FS-only审计。我们比较了2007-2013年进行整合审计(加速申报)和只进行FS审计(非加速申报)的美国小型上市公司样本，发现进行整合审计的公司，其重大错报和可操纵性应计利润的可能性更高，FS审计质量更低。我们还发现(1)审计师基于整合问题判断，以及(2)低质量的ICFR审计损害FS审计质量的证据。总体而言，结果表明整合审计的一个重要潜在后果是FS审计质量较低。

编辑∣陈扬

责编∣汪 洁