Learning from Errors: An Exploratory Study Among Dutch Auditors

Research output: Chapter in Book / Report / Conference proceedingConference contributionAcademicpeer-review

Abstract

Despite the presence of substantial quality control measures present at audit firms, results from regulator inspections suggest that auditors make errors during their work. According to the error management literature, even though errors often lead to negative immediate consequences, they also offer powerful opportunities for individual and organizational learning. However, to fully exploit such opportunities, appropriate error management strategies are necessary. This exploratory study focuses on how auditors and audit firms deal with auditor-committed errors and whether they learn from them. There are two primary, complementary strategies that organizations use to deal with errors. Error prevention is aimed at reducing or eliminating the future occurrence of errors. However, focusing on error prevention has its limits because errors are ubiquitous and it is unrealistic to expect no errors to occur. Also, an exaggerated focus on error prevention may cause organizational members to avoid sharing committed errors, due to for example fear of sanctions, limiting the potential for learning in the long run. Error management strategies on the other hand stimulate open communication about errors, analysis of errors’ root causes, with the ultimate goal of properly handling the consequences of errors and learning from errors. This exploratory study reports the results of 22 semi-structured interviews with Dutch auditors. Our analysis suggests an overall high degree of error prevention in audit practice. Auditors describe a high degree of fear of being blamed for errors, which is a potential barrier to openly discuss errors with others. Overall, we observe that openness as a key element of an effective error management climate is recognized by auditors, but is rarely practiced. While learning through courses and training takes place, the limited openness reduces the opportunities for learning from errors.
LanguageEnglish
Title of host publication9th European Auditing Research Network Symposium (EARNet)
Subtitle of host publicationLeuven, Belgium
Publication statusPublished - 30 Sep 2017

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Exploratory study
Auditors
Openness
Management strategy
Audit firms

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Gold, A. H., van Mourik, O., Van Dyck, C., & Wallage, P. (2017). Learning from Errors: An Exploratory Study Among Dutch Auditors. In 9th European Auditing Research Network Symposium (EARNet): Leuven, Belgium
Gold, A.H. ; van Mourik, O. ; Van Dyck, Cathy ; Wallage, P. / Learning from Errors: An Exploratory Study Among Dutch Auditors. 9th European Auditing Research Network Symposium (EARNet): Leuven, Belgium. 2017.
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abstract = "Despite the presence of substantial quality control measures present at audit firms, results from regulator inspections suggest that auditors make errors during their work. According to the error management literature, even though errors often lead to negative immediate consequences, they also offer powerful opportunities for individual and organizational learning. However, to fully exploit such opportunities, appropriate error management strategies are necessary. This exploratory study focuses on how auditors and audit firms deal with auditor-committed errors and whether they learn from them. There are two primary, complementary strategies that organizations use to deal with errors. Error prevention is aimed at reducing or eliminating the future occurrence of errors. However, focusing on error prevention has its limits because errors are ubiquitous and it is unrealistic to expect no errors to occur. Also, an exaggerated focus on error prevention may cause organizational members to avoid sharing committed errors, due to for example fear of sanctions, limiting the potential for learning in the long run. Error management strategies on the other hand stimulate open communication about errors, analysis of errors’ root causes, with the ultimate goal of properly handling the consequences of errors and learning from errors. This exploratory study reports the results of 22 semi-structured interviews with Dutch auditors. Our analysis suggests an overall high degree of error prevention in audit practice. Auditors describe a high degree of fear of being blamed for errors, which is a potential barrier to openly discuss errors with others. Overall, we observe that openness as a key element of an effective error management climate is recognized by auditors, but is rarely practiced. While learning through courses and training takes place, the limited openness reduces the opportunities for learning from errors.",
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Gold, AH, van Mourik, O, Van Dyck, C & Wallage, P 2017, Learning from Errors: An Exploratory Study Among Dutch Auditors. in 9th European Auditing Research Network Symposium (EARNet): Leuven, Belgium.

Learning from Errors: An Exploratory Study Among Dutch Auditors. / Gold, A.H.; van Mourik, O.; Van Dyck, Cathy; Wallage, P.

9th European Auditing Research Network Symposium (EARNet): Leuven, Belgium. 2017.

Research output: Chapter in Book / Report / Conference proceedingConference contributionAcademicpeer-review

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Gold AH, van Mourik O, Van Dyck C, Wallage P. Learning from Errors: An Exploratory Study Among Dutch Auditors. In 9th European Auditing Research Network Symposium (EARNet): Leuven, Belgium. 2017