Experience and error frequency knowledge as potential determinants of audit expertise
Article Abstract:
Frequency knowledge, which is knowledge of the rates associated with the occurrence of errors, is believed to be a key element of the expertise of auditors. Studies were made to test error-effect frequency knowledge, the frequency with which the accounts of financial statements are affected by errors, and error-cause frequency knowledge, the reason why the accounts have a particular error. The first study contrasted auditors' knowledge of error frequencies with previous research, while the second study examined the knowledge of auditors as to the causes and effects of errors in the manufacturing industry. Research results reveal that auditors have limited experience with errors; they are cognizant of only the most frequently occurring errors and their causes; and differences among auditors are not caused by their experience, industry type, or number of clients.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1991
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Identifying audit adjustments with attention-directing procedures
Article Abstract:
Auditors at a Big Eight accounting firm involved in 186 auditing engagements were surveyed to determine what procedures were involved in identifying 368 proposed audit adjustments. The results achieved by the survey support research which previously identified the three attention-directing procedures of expectations based on prior-year errors, client inquiry, and analytical review, as commonly used to signal auditing errors. Current survey results indicate that around 50% of errors were tagged by the three attention-directing procedures, and uncomplicated forms of these procedures identified a large number of errors. Results also suggest that procedures involving internal accounting information were more diagnostic when controls were strong, while evidence external to accounting data signaled more errors when controls were weak.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1989
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Sequential belief revision in auditing
Article Abstract:
Experiments were conducted to examine auditors' belief revision systems and to discover their attitudes toward new evidence. Belief revisions were dependent upon the manner and order in which evidence was received. Auditors were prone to revise their beliefs in the face of new evidence while general social science literature reports that people avoid new evidence. Auditors revised their beliefs to a further extent than the average person when confronted by evidence that disproved their current belief.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1988
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