Date of Award


Document Type

Open Access Dissertation


Moore School of Business


Business Administration

First Advisor

Scott D. Vandervelde


Offshoring audit tasks is becoming common among international accounting firms. Although tasks currently performed offshore require preparers to exercise little or no professional judgment, firms are poised to expand the volume and scope of procedures performed offshore. While critics argue that offshoring results in reduced audit quality, advocates maintain that offshored procedures are reviewed and supervised by U.S. auditors, and that offshoring may actually improve audit quality. However, little is known about how offshoring impacts reviewers and the review process. This study explores how offshoring interacts with varying levels of preparer judgment to influence reviewers’ judgments. Because firms plan to expand the scope of procedures performed offshore, investigating how reviewers respond when offshore preparers exercise higher levels of professional judgment allows practitioners and regulators to understand both current and future implications of offshoring. Results indicate that U.S. based reviewers are equally likely to identify deficiencies in audit test work, regardless of whether the test work was performed in an offshore location or in the local office. However, increasing the level of judgment required by the preparer has differential impact on reviewer effectiveness. Specifically, auditors reviewing high-judgment procedures prepared offshore perceive preparers to be more competent, and subsequently detect fewer errors during workpaper review. The same is not true for auditors reviewing low-judgment procedures prepared offshore or for auditors reviewing procedures performed by U.S.-based preparers. These findings suggest that while offshoring low-judgment procedures does not significantly impact audit quality, firms should consider the potential implications of expanding the complexity of procedures performed offshore.


© 2015, Kristen Kelli Saunders