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We commend the International Ethics Standards Board for Accountants for the initiative in releasing the two related Exposure Drafts regarding sustainability assurance and the use of external experts. There is a need for assurance over sustainability information, and for that assurance to be provided by professional people who have the appropriate guidance on ethical issues. There is an increasing need to draw on the work of experts and an increasing possibility that inappropriate reliance on that work by professional accountants and sustainability assurance practitioners may threaten compliance with the fundamental principles of the code of ethics. [ABSTRACT FROM AUTHOR]

This paper examines the implications of the proposed merger of the Australian Accounting Standards Board (AASB), the Auditing and Assurance Standards Board (AuASB) and the Financial Reporting Council (FRC) into a single entity. The merger is designed to improve efficiency, consistency and the adoption of new sustainability standards. During a panel discussion at the AFAANZ Annual Conference, experts analysed the potential impact of the merger on standard‐setting practices, highlighting the need for robust justification and increased transparency. The study highlights the complex interplay of regulatory, national and international contexts shaping this remarkable restructuring. [ABSTRACT FROM AUTHOR]

The International Auditing and Assurance Standards Board (IAASB) issued for public comment Proposed International Standard on Auditing 570 (Revised) Going Concern. The Australian Auditing and Assurance Standards Board (AUASB) and New Zealand Auditing and Assurance Standards Board (NZAuASB) also called for comments. The Auditing and Assurance Standards Committee of AFAANZ prepared a submission, based on the findings reported in extant research, informing a number of the questions asked by the IAASB. This technical note presents the formal submission made to the IAASB. [ABSTRACT FROM AUTHOR]

SUMMARY: On March 28, 2023, the Public Company Accounting Oversight Board (the Board or PCAOB) issued a request for comment on its Proposed Auditing Standard—General Responsibilities of the Auditor in Conducting an Audit and Proposed Amendments to PCAOB Standards (Public Company Accounting Oversight Board (PCAOB) 2023). This commentary summarizes the participating committee members' views on selected questions. [ABSTRACT FROM AUTHOR]

The New Zealand External Reporting Board (XRB) issued for public comment a standard on Assurance Engagements over GHG Emissions Disclosure. The Auditing and Assurance Standards Committee of AFAANZ prepared a submission, based on the findings reported in published research, responding to a number of the questions asked by the XRB. This technical note presents the formal submission made to the XRB. [ABSTRACT FROM AUTHOR]

The International Auditing and Assurance Standards Board (IAASB) issued for public comment Proposed International Standard on Auditing 500 (Revised) Audit Evidence. The Australian Auditing and Assurance Standards Board (AUASB) and New Zealand Auditing and Assurance Standards Board (NZAuASB) also called for comments. The Auditing and Assurance Standards Committee of AFAANZ prepared a submission, based on the findings reported in extant research, responding to a number of the questions asked by the IAASB (and AUASB/NZAuASB). This technical note presents the formal submission made to the IAASB. [ABSTRACT FROM AUTHOR]

Background: Remarkably little research has been published on chronic exertional compartment syndrome (CECS) of the forearm. This study investigated forearm flexor compartment pressure pre- and post-exercise in elite motorbike racers clinically diagnosed with CECS and assessed their grip strength before and after arm pump exercise. Methods: Elite motorbike riders with a clinical diagnosis of CECS of the right forearm when racing were recruited during the opening rounds of a British Superbike season. Their grip strength and forearm flexor compartment pressures were measured before and after a set exercise programme. Results: Of the 11 riders recruited to the study, 10 completed the full testing regime. The mean pre-exercise forearm compartment pressures [11.7 mmHg (range 7–17 mmHg)] significantly increased post-exercise [30.5 mmHg (range 15–45 mmHg)], with a mean increase of 18.80 mmHg (P < 0.0001). The mean pre-exercise grip strength [50.61 mmHg (range 37–66.7 mmHg)] decreased post-exercise to [35.62 mmHg (range 17.1–52.5 mmHg)], a mean decrease of 14.99 mmHg (P < 0.0001). Conclusion: There is a statistically significant increase in the forearm flexor compartment pressures in elite motorbike racers with CECS, but with marked variability of these values. Grip strength decreases statistically significantly following onset of symptoms of CECS of the forearm. [ABSTRACT FROM AUTHOR]

Where an auditor's sceptical disposition (trait scepticism) is directed toward non‐diagnostic information, there is a risk that a sceptical consideration of diagnostic information could be diluted. This may be one reason why trait scepticism is not consistently reflected in sceptical judgments and actions (state scepticism). We develop a scale to measure an individual's predisposition toward engaging with visual elements of the environment (aesthetic engagement) and test, in two experiments employing students and practicing auditors, whether aesthetic engagement moderates the trait – state scepticism relationship. We find that aesthetic engagement attenuates the positive relationship between trait and state scepticism. [ABSTRACT FROM AUTHOR]

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We investigate the effect of partner communication on the level of professional skepticism in auditor judgments and actions within the context of the fraud brainstorming discussion meeting where the partner is of the view that there is a low likelihood of fraud. Across two studies, we examine the effect on professional skepticism of the partner's communication on the likelihood of fraud (making their own view known, making management's view known, or not making any view known) and the skeptical orientation being encouraged (outward orientation toward the veracity of management representations and/or inward toward the fallibility of the auditor's judgment processes). We find that auditors exhibit higher levels of professional skepticism when the partner expresses management's view, rather than their own view or no view, that there is a low likelihood of fraud. We also consider what causes these differences. Emphasizing an inward skeptical orientation was not found to be more effective in encouraging professional skepticism in audit judgments than emphasizing an outward skeptical orientation. Importantly, emphasizing both an inward and outward skeptical orientation was more effective in encouraging professional skepticism in audit actions than emphasizing only an outward orientation. [ABSTRACT FROM AUTHOR]

A supplementary appendix for a study that examined the role of hierarchical authority in determining the level of predecisional distortion of evidence by auditors, is presented.

We examine, in a controlled experimental setting, whether changes in investor mood cause changes in the determinants of stock prices. Our results show that a deterioration in mood, reflected in the negative dimensions of mood state, increases the level of risk aversion in male, but not female, investors. We find no evidence to suggest that a change in mood impacts on investors' forecasts of future earnings or future cash flows. By establishing the causal impact of a change in mood on risk aversion, our study provides support for archival research that relates various market anomalies to investor mood. [ABSTRACT FROM AUTHOR]

Purpose – The aim of the research is to examine potential differences in the levels of ambiguity tolerance between Australian and Chinese accountants at the national, rather than individual, level. Design/methodology/approach – Ambiguity tolerance levels of final year accounting students (proxying for entry level accountants) and first year accounting students from Australia and China were measured using the MacDonald AT-20 Ambiguity Tolerance Index. Comparisons were made across the four subject pools with a view to identifying national level differences suggested by the cultural, sociological, historical, and contemporary issues impacting on the accounting profession in the two countries. Findings – Entry level accountants in China are less tolerant of ambiguity than their Australian counterparts. There are, however, no statistically significant differences in the levels of ambiguity tolerance between first year accounting students in China and Australia. Research limitations/implications – The research employed final year accounting students as surrogates for entry level accountants. Future research could usefully extend this research to practicing accountants at different ranks. Practical implications – Given the central role of ambiguity in contemporary accounting practice, the potential implications are broad. This is particularly the case with regard to the harmonization of accounting practices in that accountants with different tolerances for ambiguity might make different decisions in the face of similar accounting standards and circumstances. Interestingly, the results from the research suggest that differences in ambiguity tolerance are attributable to events occurring while students are studying. Originality/value – This research examines ambiguity tolerance at the national level (rather than the individual level), thereby allowing practical implications to be prescribed. [ABSTRACT FROM AUTHOR]