Development of auditors: how novice auditors experience digital learning.

Development of auditors: how novice

auditors experience digital learning.

MSc Thesis Accountancy & Controlling

Name: Yannick van der Wal Student number: S2475553 Address: Plutolaan 100, Groningen Email: y.r.van.der.wal@student.rug.nl

Supervisor: S. Girdhar

Study Program: MSc Accountancy & Controlling Date: 18-01-2021

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Abstract

Professional auditors are not just born. Rather, they are developed through a process of continuous learning, both from formal education as well as informal learning on the job. However, the Covid-19 pandemic has changed the professional learning environment drastically, switching it from the traditional way of learning to a more digital way of learning. The aim of this study is to evaluate the experiences novice auditors have with the change in professional learning environment due to Covid-19. Using semi-structured interviews from a sample of 8 novice auditors from Big four firms in the Netherlands, this study found that for both formal learning and informal learning the experienced interaction has declined. The novice auditors experienced less interaction among each other, as well as between themselves and more experienced auditors. This interaction and discussion is necessary for novice auditors to acquire the knowledge and develop the skills to be successful in the audit profession.

Keywords: Digital learning * Higher education * Audit education * Learning on the job * Accounting profession * Covid-19

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Table of contents

1. Introduction ... 4

2. Literature review ... 8

2.1 Formal learning ... 8

2.2 Informal learning ... 9

2.3 Digital learning ... 9

3 Research methodology ... 11

4 Results ... 13

4.1 Formal learning ... 13

4.1.1 Freedom and flexibility ... 13

4.1.2 Interaction ... 14

4.1.3 Focus at home ... 16

4.2 Informal learning ... 17

4.2.1 Working in a team ... 17

4.2.2 Soft skills ... 19

5 Conclusion & discussion ... 21

5.1 Conclusion & discussion ... 21

5.2 Limitations and future research ... 22

6 References ... 24

7 Appendix ... 27

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1. Introduction

ith the current Covid-19 situation at hand, changes are happening rapidly in the world around us. Governments around the world have placed their country into lockdown, which has major consequences for all sort of companies around the world. Employees are forced to work from home instead of at the office. However, not only the working world is hit by precaution measures. On 12 March 2020, the Dutch government announced that the Dutch Universities were closed until further notice due to the Covid-19 outbreak. Physical classes were cancelled and from that point they were hosted online instead. This of course, is a big change for professionals taking executive education. A profession in which working and education are inseparable is the audit profession. For auditors continuing professional development is crucial, as they need to keep pace with the ever-changing regulatory requirements (Kusaila, 2019). They ensure this continuing professional development through both formal and informal learning. Especially novice auditors can be seen as both students and professionals. In the Netherlands, novice auditors work as junior accountants for a firm, while also following a Post-Master at the University. University education provides a proportion of their knowledge, whilst knowledge is also gained from learning on the job (Westermann, 2015). But what impact does the Covid-19 crisis have on their learning experience? That is the question this paper is going to dive into; how do novice auditors experience the current changes to a more digital way of learning?

The interest in higher education and accounting education specifically, has increased over the past two decades (Zenuni, 2017). The expectations for auditors’ performance are high and the need to educate, train and develop competent and professional auditors has increased over the last years (Plant et al., 2017). The audit is a profession where continuous professional development is required. Auditors need to comply with auditing standards, pass regulatory inspections and uphold their public responsibility (Westermann et al., 2015). In order to create global quality standards regarding the education of auditors, the International Federation of Accountants (IFAC) created the International Accounting Education Standards Board (IAESB). The IAESB “develops and issues publications on prequalification education and training of professional accountants, and on continuing professional education and development for members of the accountancy profession” (IAESB, 2013). The standards IAESB came up with are the so called eight “International Education Standards”(IES) (IAESB, 2008). The IES are designed to achieve quality and consistency in global accounting education. Although the IAESB does not have full global legitimacy (Crawford et al., 2014) this research will still use

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IES as the guideline, since a lot of countries, including the Netherlands, do comply with the IES.

The IES standards discuss the skills and competencies that auditors can obtain through formal learning (f.e. university program) as well as those obtained by informal learning (learning on the job) (Needles, 2008). This research will focus on two of the eight IES. The focus of this research will be on IES 2: “Content of Professional Accounting Education Programs” and IES 5: “Practical Experience Requirements”. IES 2 focuses especially on the knowledge accountants need to acquire during their education. As can be derived from its title, IES 2 is about the initial professional development. It addresses the knowledge that auditors need to acquire during their professional accounting education programs. IES 2 ensures that auditors gain enough advanced professional accountancy knowledge so that they will be able to function as competent professional accountants. This IES also underlines the importance of high-quality education in order to be prepared for an increasingly complex and changing environment (Needles, 2008). Therefore, it is important to look into the perceived effectiveness of the current digital education environment to see if the requirements of IES 2 can still be met. Similar to IES 2, IES 5 is about initial professional development. However, this standard addresses the professional experiences required to become a professional accountant (Needles, 2008). Furthermore, IES 5 describes the nature and length of informal learning, novice accountants should at least experience, whilst working under an experienced professional auditor. IES 2 and IES 5 state the importance of respectively formal learning and informal learning. It is important to research whether the requirements of both IES can still be met given the current situation.

As mentioned above, auditors gain knowledge through both formal and informal learning. Power (1991) states that auditors gain most knowledge and competencies on the job in a team setting. Thus, when an experienced auditor shows a novice auditor how to perform a task. This way of informal learning helps auditors gain the required skills such as, intellectual skills, personal skills, interpersonal and communication skills, and organizational and business management skills (Needles, 2008). However, Billet and Choy (2013) stress that both formal learning and informal learning are required to maintain quality. If only informal learning is acquired, bad traits can be reinforced, which is a known negative effect of informal learning (Kusaila, 2019). Formal learning is required for auditors to obtain necessary knowledge and competencies in the areas of accounting and finance, organization and business, and information technology (Needles, 2008).

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The circumstances for both formal and informal learning have changed drastically since the start of the Covid-19 crisis. Both working, as well as following education, is done digitally from home. But the question is whether these changes have influenced the quality of learning? It is important to keep high quality of learning available under the forced changes Covid-19 brings to the learning environment, to ensure that auditors will be able to comply with all required standards. In fact, these forced changes due to Covid-19 could possibly lead to a lasting switch from learning in person to digital learning.

This research looks at the changes Covid-19 brought to learning for novice auditors. It discusses the differences between the traditional way of learning and this new digital way of learning. The main goal is to explore how novice auditors experience this new way of learning. Understanding how auditors experience learning, enables organizations to maximize employee development and to stay competitive in a rapidly changing technological environment (Kusaila, 2019). Following this, the main research question for this study is:

How do novice auditors experience learning during the Covid-19 crisis?

In order to answer the question mentioned above this study conducted interviews with novice auditors who also follow formal education. The benefit of interviewing auditors from this particular sample, is that they fully experience both formal learning and informal learning. The individuals from the sample of this research all work as junior accountants, whilst also following a Post-Master at a university. They are, therefore, an ideal group to investigate in order to discuss the differences between the traditional way of learning and this new fully digital form of learning. The interviews were semi-structured, which creates flexibility and does not limit the possible answers received (Horton et al., 2004). During these interviews the novice auditors shared both their positive and negative experiences with digital learning. For example, on one hand, they experienced that the online environment was very practical and there were tools that could help to make learning effective. On the other hand, they experienced that interaction in an online environment is less intensive in comparison to the traditional professional environment.

This study contributes to existing literature as it, by all means, expands the work of Westermann et al. (2015). Westermann et al. (2015) stated that learning is crucial in this professional environment and that it is a dynamic process challenged by opposing forces. These forces that Westermann et al. (2015) described are macro forces that affect the profession. Examples acknowledged by prior research Westermann et al. (2015) name are: firm mergers in

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the 1990s, the prominent accounting scandals of the early 2000s (f.e. Enron) and the continuous changing financial accounting standards. According to Westermann et al. (2015), these macroenvironmental changes have affected the ways in which employees (auditors) learned from each other. In their research, they conducted interviews with 30 audit partners and found that changes in the audit work due to macro forces had an impact on learning of audit staff. They discussed that future research should try to examine the research gap that arises whenever new challenges occur, that change the professional environment over time. The Covid-19 crisis definitely has the effect that Westermann et al. (2015) mention as a potential research gap. It has a direct impact on the professional environment, and it could possibly lead to a lasting switch from learning in person to digital learning. Therefore, this research contributes by filling the gap on how novice auditors experience learning in this changed professional environment.

In addition, research of the learning process of auditors has high practical relevance and can help audit firms to better facilitate the learning process (Dierynck et al., 2019). The research of Dierynck et al. (2019) explores how novice auditors experience learning and from this can be derived what methods of learning should be altered.

In the following section of this paper I will discuss the existing literature. The previous conducted research and underlying theory will be discussed. Chapter 3 of this paper describes the methodology and the data collection. In chapter 4 the results are displayed and discussed. Lastly, chapter 5 summarizes the paper and discusses its implications and limitations as well as suggesting possible areas of future research.

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2. Literature review

One thing that stands clear is that professional auditors are not just born. They are developed throughout a process of continuous learning and education (Dierynck et al., 2019). Learning is extremely important for auditors, since learning improves the performance of auditors (Bonner and Pennington, 1991). In this research, based on Earley (2001), learning is defined as the acquisition of knowledge, skills and attitudes in such a way that it can be appropriately transferred and applied in another setting. In this section the literature concerning the learning of auditors will be discussed. At first the importance of formal learning and informal learning will be discussed. Secondly, the use and possibilities of digital education will be discussed. Lastly, there will be a discussion regarding how the available theory could be used to hypothesize the results of this study.

2.1 Formal learning

In order to be successful, auditors require a unique body of highly complex knowledge (Bédard, 1989). Formal learning can ensure that professionals have an appropriate background that provides a reasonable chance of success in the field (Needles, 2008). Formal learning can be seen as the traditional way of learning. Simpson and Burnett (2019) found that the important part for students is that they feel challenged by their academic rigor and that they are engaged within the college environment. They found that if the engagement is high, students tend to perform better. This can be more difficult in an online environment. Empirical research concerning the role of motivation for auditors is scarce. However, Kadous and Zhou (2019) found that intrinsic motivation improves audit judgment through improvements in cognitive processing.

For auditors, education is seen as an important learning process (Dierynck et al., 2019). Audit-related education is required in order to start the audit profession, obtain certification and maintain certification. The formal education required to start in the auditing profession is discussed in IES 1 and IES 2. Formal education focuses mainly on declarative knowledge (facts and information) (Dierynck et al., 2019). However, professional auditors need to combine declarative knowledge with procedural knowledge (Bonner and Walker, 1994). Procedural knowledge is knowledge of certain steps or rules to perform certain tasks (Dierynck et al., 2019). This kind of knowledge can be obtained through informal learning (on the job learning) (Westermann et al., 2015), which will be discussed in the next subsection.

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Although formal learning provides the necessary knowledge and competencies in the areas of accounting and finance, organization and business, and information technology (Needles, 2008), auditors gain the most knowledge when performing progressively more complex work under the supervision of an experienced professional auditor (Power, 1991). In the audit profession, changes in the organizational environment are rapid and formal learning does not always adapt quickly enough (Eraut, 2004; Inanc et al., 2015). In order to succeed in this rapidly changing environment professionals need to be motivated to keep improving their own set of skills (Kusaila, 2019). This can be done on the job, which is called informal learning. Informal learning is an important component in the development of auditors (Kusaila, 2019). On the job, auditors develop hard skills to successfully perform tasks (Dierynck et al., 2019) and soft skills such as communication skills (Needles, 2008). Westermann et al. (2015) found that auditors believe that one-on-one interaction when working on engagements is crucial for auditing professionals to achieve success. They state that continuous feedback and coaching from more experienced auditors is a fundamental part of the development of auditors. If novice auditors do not receive this critical feedback, they might not learn the necessary critical thinking skills to handle certain complexities (Westermann et al., 2015).

2.3 Digital learning

Since the start of the Covid-19 pandemic, both formal learning and informal learning are done digitally and novice auditors need to adapt to this new situation. The current generation of students and starters experience high expectations (Teh et al., 2015). Students nowadays are seen as more capable and especially, their perceived proficiency in technology is high (Howe and Strauss, 2015). Therefore, the switch to a digital learning environment should not be too hard for them. Furthermore, the digital education is an area with great potential. There are several theories that help explain the effectiveness of digital learning. The first theory is the multimedia principle, which states that if you combine multimedia such as pictures or videos to words, people learn better than from words alone (Mayer, 2019). Implementing this multimedia might be easier in an online environment. Clark and Mayer (2016) go even further and state that the use of multimedia is essential for effective digital learning. The second theory that helps to explain the effectiveness of digital learning is the cognitive load theory as discussed by Sweller et al. (2011). The cognitive load theory is about not overloading the short-term memory with too much input. Wesshort-termann et al. (2015) state that an increase in technology could lead to more distractions. These distractions can lead to experiencing a high cognitive

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load, which leads to a reduction of academic success (Frein et al., 2013). In addition, Westermann et al. (2015) argue that technical developments might lead to less face-to-face communication between the novice auditor and the experienced auditor and could possibly discourage critical thinking.

In conclusion, both formal learning and informal learning are important in the education process of an auditor. However, the current Covid-19 pandemic has brought drastic changes to the professional environment. There has been a switch from the traditional way of learning to digital learning. Research should examine the effect the Covid-19 pandemic has on the way novice auditors experience learning. Helliar et al. (2009) found that for successful learning participation is vital, and that learning by doing, receiving feedback and being able to ask questions and discuss questions is necessary for learning to be successful.

This research uses interviews to investigate whether or not novice auditors find digital learning successful. Their experiences with digital university education (formal learning) as well as their experiences with learning on the job (informal learning) will be discussed. Beforehand, these experiences can be both positive and negative. On one hand, Westermann et al. (2015) argue that an increase in technology could lead to more distractions, while also leading to less face-to-face communication and feedback. Therefore, it is possible that novice auditors experience digital learning as less effective than the traditional way of learning. However, on the other hand, the opportunity to increase the use of multimedia (Mayer, 2019; Clark and Mayer, 2016) could actually lead to novice auditors experiencing digital learning as more effective than the traditional way of learning. In the following section the research method will be discussed to show how the results of this study were derived.

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3 Research methodology

To answer the research question, data is collected through interviews. During these interviews the research question should be approached from different angles in order to come up with the most reliable answer. Therefore, this study used a sample that contains of novice accountants from different organizations. The sample does, however, contains only novice accountants from Big four organizations, due to accessibility reasons. By interviewing novice auditors from different Dutch Big four organizations, the study tried to mitigate the possible bias that comes from evaluating a single course or a single working method. Furthermore, this should give a good view on the accounting education system. The sample consists of 8 novice auditors who are in their final phase of their education. They are all currently following their Post-Master after finishing the initial university program. They follow this education part-time, in addition to their work as junior accountants. The auditors in the sample have between 3 and 15 months of working experience. The novice auditors were personally approached to participate in this research.

Semi-structured interviews were used to collect the data. The use of semi-structured interviews creates flexibility and does not limit the possible answers you will receive (Horton et al., 2004). The interviews started with some broader questions about the interviewees view on and experiences with digital learning. A set of questions which were the guideline throughout all interviews can be found in Appendix A. Based on the answers of the interviewee the remaining of the interview went into more depth and focused on the reasoning behind the interviewee’s opinion. Using open ended questions and approaching a discussing way of interviewing, should lead to more credibility in the answer to the research question. The possibility to gain in-depth understanding increases and the social interaction in an interview leads to more extensive answers (Noble and Smith, 2015).

The interviews were held in Dutch, since this is the native language of both the interviewer and the interviewees. At the start of the interviews the interviewees were informed about confidentiality and anonymity. The interviewees were asked if they agreed with the interview being recorded. This made sure that the interviewer could speak and listen freely, without the need of taking notes during the interview. During the interview, questions were asked to collect data to help answer the research question. Questions that were asked were for example: “How do you experience interaction during digital education?” and “How do you experience working in a team online?” Once the interviews were held and recorded, they were transcribed. Irrelevant parts were excluded and only the relevant quotes were transcribed. The

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transcription was made in Dutch. These transcribed interviews were sent to the interviewees to check that what was noted, was indeed valid. Furthermore, the interviewees had the opportunity to add or adjust information or certain comments. The first step for analysing the data was to categorize all answers from the interviewees. Secondly, the answers were coded. This was done by labelling the positive and negative experiences. The quotes that were found representative or particularly interesting were than included into the results section. This entire process was executed by hand. Quotation in the results of this study are translated into English from the Dutch transcription.

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4 Results

In this section, the results of the interviews will be discussed. The results contain the view of the interviewees on the way they experienced digital learning. Furthermore, their opinion on whether or not they believe that digital learning is effective will be discussed. The result section is made up of two sub-sections. At first, the experiences of novice auditors with digital formal learning will be discussed. Secondly, their experiences with digital informal on the job learning will be discussed. Each section will contain several quotes of the interviewees.

4.1 Formal learning

This sub-section discusses how novice auditors experience formal learning. The quotes from this section are, specifically, about the novice auditors’ experiences as students during the Post-Master university program they are following. In general, the interviewees experienced digital education in a less pleasant way in comparison to the traditional way of learning. From the eight interviewees, two had a strong preference for the traditional way of education. Only one of the interviewees preferred complete digital education. Most of the interviewees were opting for a hybrid way of education. They stated that the session where it is solely about providing information can be easily done online. However if it is about having a discussion the traditional way of education is preferred.

4.1.1 Freedom and flexibility

Something that became very clear from the statements of the interviewees was that they experienced more freedom and flexibility in the online environment. The following quote of interviewee 3 shows this nicely:

“It is very nice that you can do everything in your own time. You have more freedom to decide yourself when you want to follow certain education. Furthermore, you are less dependent on others and you can work on your own pace. You can pause and rewind every time you want, which sometimes helps to understand things better and take better notes.”

Interviewee 2 also talked about the increased amount of freedom and, in addition, the opportunities that this has, as can be seen in the following quote:

“Digital education is much more flexible. You can follow it whenever you want and wherever you want. This has many benefits. Now, if you cannot attend a certain class at the given time, you can just follow it at a time that does suit you. (…) Furthermore, it

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also gives opportunities. For example, you might be able to follow courses from different universities. You can select courses from universities in the Netherlands, England or even China. This could possibly open a lot of windows.”

From these two quotes can be derived that the auditors experienced more flexibility in following digital education. They have more freedom in when they want to follow the education and at what pace. This is in line with the findings of Ramli et al. (2018) who found that when students follow digital forms of education, they have more room for self-regulation. In their study they linked this to a negative effect on the experience of academic stress. Academic stress can have a negative effect on performance (Struthers et al., 2000). Therefore, the higher amount of flexibility in online education for auditors could have a positive effect on performance. In the second part of the quote Interviewee 2 also gives some future opportunities of a digital education environment.

4.1.2 Interaction

The second aspect that the novice auditors experienced was that the interaction during sessions was quite different in the digital environment in comparison to the traditional environment. This was experienced both positively and negatively. The positive side that was mentioned by multiple interviewees was that the interactive meetings with teachers and other students became more efficient. The following quote came from interviewee 6:

“It is often more efficient. From more parts of the material it is now expected that you do them as additional preparation at home, instead of working on them in the classroom. Therefore, the meetings become straighter to the point. During these meetings you can ask more direct questions, because you already thought about the material in advance. This helps to get a better understanding of the material.”

Interviewee 8 underlined this statement by stating the following:

“The digital meetings are more structured. There is less chitchat and it goes straighter to the point. You are no longer fooling around, wasting time”

From these statements of interviewees 2 and 8 can be that digital education is sometimes experienced as more efficient. It goes more into depth into the material which could lead to better understanding of the material. This positive experience with this straight to the point way of digital education might be explained by using Hofstede Insights (2020). Hofstede Insights state that Dutch people tend to have a very direct way of communication. However as

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mentioned above, the experienced change in interaction was not just positive. An opinion that was widely supported among the interviewees was that the new digital situation had a negative effect on the amount of interaction experienced during sessions. The following statements of interviewees 8 and 2 respectively underline this:

“There is less interaction between the teacher and the students. In person, the threshold to contribute is lower than in a digital situation. Even though you would say it would not matter; it is the case. It works better when you are in a room together.”

“Sometimes communication online is difficult. For instance, your microphone is lagging or there are other technical difficulties. In that case you soon think: never mind, I will find it out myself. I feel like more people experience this and, therefore, I think interaction is definitely less.”

The quotes clearly show that in the online environment, less interaction is experienced. As discussed in the literature overview, Simpson and Burnett (2019) state that for students, in order to perform, it is important to feel engaged in the college environment. The fact that there is less interaction experienced by the interviewees could lead to a decrease in engagement. This might have a negative effect on education quality. This is something that is experienced by interviewee 5 as well:

“You experience that there is less interaction and, therefore session go less in depth. There is less discussion, which I believe has a negative effect on the quality.”

In addition to the lack of interaction between the accountants and the teacher, the novice auditors also experience less interaction between the students themselves. The following quote of Interviewee 2 shows this experience:

“You no longer see the other students. You do not interact with them and therefore you do not if they experience the same problems. You do not know if the question you have, is a question more people have. Therefore, you are more likely to hold questions for yourself and ask them by email or just try to figure it out by yourself.”

From this quote of interviewee 2 can be derived that the questions asked are much less ask in front of the entire audience, but more in a personal way through email. This could take away the process of learning as a group. This is something more of the interviewees experienced. Based on the following quote of interviewee 6 this has a negative effect on the learning

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experience of accountants, which is also in line with the findings of Helliar et al. (200) who underlined the importance of discussion and debates.

“When working on, for example, a case as a group you now miss certain parts. Often you divide the work, but when you sit together you discuss things with each other, while in an online environment you contact the teacher quicker. The communication between the other students and the teacher often goes through mail so now you no longer take part in that. You just miss certain things”

4.1.3 Focus at home

Due to the Covid-19 pandemic, in addition to learning being online, learning is in a different environment than the university, the library or the office in which it was traditionally. All learning is now done from home. Something that was experienced very negatively by the novice auditors, was the extent to which they were able to maintain focus when following digital education from home. The following quotes of interviewees 4 and 5 respectively underline this: “Remaining focus is harder at home. Everything takes longer. You are so much easier distracted. You go on your phone, look at your second screen. You are often doing different things.”

“(…) you also hear more noises from surroundings. The neighbour mowing the lawn for example. Or when there are visitors in the other room. Just all sorts of homely noises.”

The quotes above all describe the different sorts of difficulties the accountants face to maintain focus when following digital education from home. Interviewee 6 came with possible explanations of why it is harder to remain focus at home:

“I think you might be easier distracted because of the lack of social control. In class it is just not the expected behaviour to do other things all the time and you don’t want other people to see you are doing other things all the time. (…) In the traditional situation the teacher also has more control of the classroom I believe. In class, if the teacher sees you are doing other things, they will give you the turn or ask you a question. They cannot do this in the digital environment. The pressure to maintain focus is therefore lower.”

The statement above provides two outside factors that could help explain why auditors experience more difficulties in maintaining focus at home than in a classroom. The lack of social control from other students can be an explaining factor, as well as the control of the

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teacher. Another thing that novice auditors experienced about studying at home is the facilities available. Interviewee 7 said the following about this:

“The situation at home is not really optimal. You do not have a perfect environment. Apart from the additional homely noises you do not have an optimal desk, in the summer you do not have air conditioning when it is hot. You are working the entire day on your tiny laptop at home. I noticed that my posture suffered from this.”

Webb and Turner (2019) did research about the relationship between living arrangements and student’ performance. They found no linkage between living arrangement and students’ performance. Therefore, the statements above might not have any effect on the actual educational quality or educational effectiveness. However, according to these quotes it really does have influence on the way novice auditors experience education.

4.2 Informal learning

As discussed in the literature section, auditors gain the most knowledge when performing progressively more complex work under the supervision of an experienced professional auditor (Power, 1991). In other words, informal learning is important in the development of auditors. This second sub-section of the results discusses the experiences of novice auditors with digital informal learning. The quotes in this section contain the novice auditors’ experiences with on the job learning.

4.2.1 Working in a team

As mentioned above, novice auditors learn most when they work under the supervision and guidance of a more experienced auditor. However, this relationship between the novice auditor and the experienced auditor changed in the situation of Covid-19 based on the experiences of the interviewees. The following was said about this by interviewees 8 respectively:

“You ask questions less frequently. When you sit next to your co-worker, you often quickly ask a small question about certain things. However, in the digital situation you often wait longer before asking questions.”

Interviewee 6 has similar experiences, however she also sees the positive side of asking questions less quickly:

“… (Online) you puzzle a bit longer yourself before asking questions. Perhaps you learn even better when you find out more things yourself, however it comes at the downside of delaying your tasks.”

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From these quotes can be derived that novice accountants sometimes experience more difficulties in asking question to a more experienced auditor. Similar to formal learning, with informal learning interaction in the online environment is experienced a bit harder. Nonetheless, continuous feedback and coaching is fundamental for the development of novice auditors (Westermann et al., 2015). Therefore, it is important that communication digitally between the novice auditor and the more experienced auditor runs smoothly and the possibility to ask question is just as easy as in the traditional way. However, not all interviewees experienced this the same way. Interviewee 7, for example, did not experienced much difficulties in asking questions:

“Although you cannot ask a quick question to the person next to you, online you can just as easily send a chat message to your supervisor. Often they respond quite fast, and answer you either by chat, or they invite you for a video call where they can explain certain things.”

As mentioned by interviewee 7, the novice auditors receive their coaching of the more experienced auditor by the means of video calls. The interviewees had different opinions about this. Interviewee 3 on one hand had a negative opinion about receiving instructions online. He stated the following:

“Sometime it is more difficult to understand certain things. If you sit next to each other in person, it is easier to take pen and paper and draw some things out for example. Personally I prefer this over the digital way.”

On the other hand, interviewee 1 was more positive about receiving instructions online. He did not notice much difference between receiving instructions in persons and receiving instruction in an online environment. Interviewee 1 said the following about this:

“Personally, I found it (receiving online instructions) even clearer than communicating physically. When you sit next to each other you sometimes cannot see the entire screen very clear. However, when sharing screens online you can see it perfectly.”

As can be derived from the quote of interviewee 1, he did not experience much difference between coaching online and coaching in person. They experienced that with the online tools available the instructions they received were just as clear. As discussed in the literate overview, one-on-one interaction when working on engagements is crucial for auditing professionals to

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achieve success (Westermann et al., 2015). Therefore, it is important that this communication is going well.

“Before (traditional way) you were together as a team, working in the same room. When someone had a meeting with the client you would have heard how it went. Now you almost only really speak with your job coach. You do have status calls with the entire team, however they are often much more superficial.”

The quote above from interviewee 4 describes how not only one-on-one communication has changed, but that the entire group dynamic is different. He states that he is less aware of what his co-workers are doing. This is experienced negatively. He believes that he now learns less from them. This is also said by interviewee 8:

“You are more focused on your own tasks. For the audit it does not really matter, however it would be interesting to really know what the other team members are doing and how they are doing it.”

4.2.2 Soft skills

Beside procedural knowledge, auditors need to develop certain soft skills on the job in order to successfully perform tasks (Dierynck et al., 2019). One of these are their communication skills (Needles, 2008). The development of communication skills was experienced differently in the digital professional environment. Interviewee 3 and 1 said the following about this respectively:

“You have less direct contact with the client. When you have questions, you discuss them first with a more experienced auditor. Often he or she then contacts the client with multiple questions combined directly. This way you have less contact with the client yourself.”

These quotes show that novice auditors use their communication skills less under the changed professional environment. They are placed less in the situation where they can develop these skills. However, not only does this lead to less opportunity to develop those skills, based on the following quote of interviewee 6 novice auditors experience less opportunity of learning in other areas as well:

“You no longer visit the client. You are doing your tasks, however you do not really know the client. You do not really know what you are auditing. You do not have a

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picture of the client. You do not know how they operate and you cannot taste the firms culture.”

Not all interviewees experienced this the same way. Interviewee 5 said the following about developing communication skills:

“You still talk to the client, although now it is just using video calls. You still have the opportunity to develop communication skills by doing process discussions where you discuss for example the payment process of a company. It is just online instead of in person.”

Based on the experience of interviewee 5 one can see that there is still room to develop communication skills, even though it will be done differently. The following quote of interviewee 7 shows the change in learning regarding communication skills:

“You still get reviewed on your communication by a more experienced auditor. For example, the first couple of time I wanted to send a question to the client by mail, my e-mail was checked before I may send it. Now I still need to put my job coach in the CC, so if I do something that could have been done better it will be communicated with me.”

This quote shows that the development of communication skill might no longer be only about vocal or physical communication, but that it also contains online communication.

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5 Conclusion & discussion

5.1 Conclusion & discussion

The interest in the education and development of auditors has increased over the past two decades (Zenuni, 2017). This study adds to existing literature by investigating how novice auditors experience the change from traditional learning to digital learning as an effect of the Covid-19 pandemic. It fills the gap introduced by Westermann et al. (2015) who described that future research should investigate the learning experience of auditors whenever challenges occur that change the professional environment over time. This study fills the research gap by examining how the change from a physical environment to an online environment due to the Covid-19 pandemic, influenced the way novice auditors experience learning. This study examined both formal learning and informal learning by conducting interviews among 8 novice accountants from Big four organizations in the Netherlands. In this section the results of this study will be discussed and, in addition, the limitations of this study and the possible areas for future research will be considered.

First of all, in the case of formal learning, the findings of this study showed that the digital situation changed the interaction during formal education sessions. Although these sessions were experienced as more efficient, less interaction was experienced between students and the educator, as well as between students themselves. In the case of a lecture the novice auditors did not experience much difference, however they did experience less discussion when following an interactive session and discussing cases. Libby (1991) stated that case studies are useful to ‘illustrate real-world institutions and practices’. Craner and Lymer (1999) showed that this was especially true in the case of more professionally-oriented education such as auditing or tax. The effective use of case studies can develop and improve judgmental skills and analytical reasoning (Dennis, 2003), which is obviously very important for auditors. Since the auditors experienced less interaction and discussion during digital session the development of such skills can possibly fall behind.

In addition, this study showed that novice auditors experience difficulties when following online education from home. They had a more difficult time maintaining focus, since they experienced more distractions. This could also negatively affect the extent to which novice auditors are able to obtain the required knowledge and develop the required skills. This is in line with the statement of Westermann et al. (2015) who said that an increase in the use of technology leads to an increase in distractions. However, on the other hand the results of this

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study showed that novice auditors experienced the digital education environment as more flexible, which could actually have a positive effect of the learning experience of novice auditors.

Next to changes in formal learning, this study showed that novice auditors also experienced a change in informal learning. Firstly, novice auditors experienced several changes in team communication. This study showed that novice auditors sometimes experienced more difficulties to ask questions online. Secondly, novice auditors experience that they learn less from the activities of other group members whilst working in a team. Westermann et al. (2015) stated that one-on-one interaction when working on engagements is crucial for auditing professionals to achieve success. Therefore, these experienced difficulties in communication could have a negative effect on the development of novice auditors. On the other side there are multiple tools online that have a positive effect on the learning experience. For example, the novice auditors experienced screen sharing as a positive fixture which helps making digital learning experiences more positive.

Lastly, the change from the traditional way of working to online working had an effect on the way novice auditors experienced the development of their communication skills. They felt that they had less opportunity to talk with clients to develop these skills, whilst on the other hand they were also developing communication skills which they may not have developed as much in the traditional professional environment.

5.2 Limitations and future research

This study contains several limitations. Firstly, the results might not be generalizable. As stated by Power and Gendron (2014), qualitative research “often involves trade-offs between studying a phenomenon in depth and having the ability to generalize results more broadly.” In this study, the interviewees were all from the Netherlands and working for Big four audit firms. It was quite a specific sample and the results might have been different in another country or if auditors from smaller firms were included in the sample. Secondly, the interviewees were all novice auditors who started their job recently. Therefore, they might not have been able to sufficiently compare the Covid-19 situation of learning on the job with the traditional situation before. Furthermore, the interviewer was inexperienced. This might have influenced the quality of the process as well as the quality of the data. Lastly, the IES was used as a guideline in this study. Nevertheless, these standards, as discussed in the introduction section, are not globally recognized, since the IAESB, which introduced these standards, does not have full global

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legitimacy (Crawford et al., 2014). Therefore, the use of IES as a guideline could be considered a limitation to the study.

As already discussed, this study only used interviews with auditors from Big four audit firms in the Netherlands. Future research can expand the sample to see if the results differ in other countries or with auditors from smaller firms. Furthermore, it can be interesting to examine the view of partners or senior auditors on the way novice auditors are learning in the situation of Covid-19 and to study if they see a difference in knowledge acquired and skills development among novice auditors, as they oversee the novice auditors. Lastly, it is likely that in a few years time the effects of the Covid-19 pandemic will become clearer. Research should, at this point in time, study how Covid-19 affected the amount to which auditors developed the required knowledge and skills. By doing this, future research can improve the understanding of how the change, the Covid-19 pandemic brought to the professional accounting environment, affected learning for novice auditors.

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7 Appendix

7.1 Appendix A: Interview Guide Introduction

1. Please tell me something about your current professional position. 2. In general, how did you feel about digital learning?

Formal learning

3. How did you experience education from home?

4. Do you feel like education from home was as efficient as having physical classes? 5. How much time did you normally need to travel to classes?

6. Has the fact that you do no longer have to travel to classes influenced the workload you have experienced, while following digital education?

7. Do you prefer following education from home, or physical education? And why? 8. Did you experience any change in workload when comparing digital education to

traditional physical education?

9. Did you experience any difficulties with technology while following digital education?

10. Have you followed any digital sessions longer than two hours? 11. How do you have experienced these long digital sessions?

Informal learning

12. How do you experience working in a team in a digital environment? 13. How do you experience coaching in a digital environment?

14. How do you experience learning on the job in a digital environment?

Completion

15. In your opinion, what are the 3 biggest changes between digital learning and the traditional way of learning?