Factors affecting the audit of revalued non-current assets: initial public offerings and source reliability

Article Abstract:

This study examines the impact of a proposal to issue shares to the public and the competence of the independent valuer on auditor judgments concerning asset revaluations. A 2x2 between-subjects design was used. Four classes of assets were revalued by a hypothetical port company and subjects were asked to assess the planned audit hours and the likelihood that they would accept the valuations as reasonable. Results indicated that auditors would plan to spend longer on the audit of revalued assets when the client proposed to make a share issue and also when the competence of the valuer was lower. They were also less likely to accept the valuations as reasonable in these cases. However, the results suggested that concern with some aspects of the valuation can override sensitivity to the competence of the valuer. (Reprinted by permission of the publisher.)

Valuation, Going public (Securities), Initial public offerings, Appraisers, Assets (Accounting)

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Audit judgment research - issues addressed, research methods and future directions

Article Abstract:

This paper outlines the purpose of judgment and decision making research in auditing. It examines the following areas of this research: policy capturing; heuristics and biases; information search, hypothesis generation and protocol analysis; knowledge and memory; group decision making; decision aids; and environmental and motivational issues. For each of these issues I outline the key research issues that have been addressed, the research methods used, a summary of past research and potential future research. (Reprinted by permission of the publisher.)

Decision-making, Decision making, Judgment, Judgment (Psychology), Psychological research

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The effect of the distribution of cases on judgmental consensus

Article Abstract:

This paper examines the effects of the distribution of cases on the level of consensus of auditor judgements by the use of a simulation study. The results show that the level of consensus is higher on extreme cases and that overall levels of consensus are affected by the distribution of cases included in a study. Some additional insights into previous research are made and some suggestions for the design of future studies are outlined. (Reprinted by permission of the publisher.)

Accounting, Financial research

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