Audit Committee Member Scepticism and Questioning Behaviour

ABSTRACT Audit committee members' (ACMs) need to exercise appropriate levels of scepticism in overseeing the financial reporting and auditing processes. However, concerns have been raised about ACMs' application of scepticism. Responding to calls for research on audit committees' oversight processes, this paper employs a multimethod qualitative design to examine ACM scepticism through their questioning behaviour. First, we analyse the questions 29 very experienced ACMs prepare for external auditors and CFOs regarding a significant accounting estimate. We outline the observed similarities and differences in the questioning behaviour between ACMs with alternate expertise, namely, former audit partners and nonaccountant directors. The questions reveal the focus and nature of ACMs' scepticism and questioning behaviour, and how this differs between former audit partners and nonaccountant directors. Second, we conduct supplementary interviews with Big 4 audit partners about their experiences of ACM questioning behaviour and scepticism to triangulate our findings from our analysis of ACM questions.