Judging auditors' technical knowledge

Article Abstract:

A study was conducted to determine the accuracy of auditors' rating of their own and their subordinates' technical knowledge. Findings revealed that assessed technical knowledge has an influence over the planned levels of review. Majority of the respondents, which include both subordinates and supervisors, reported that supervisors frequently or always adapt their reviews to the perceived technical knowledge of subordinates. It was also revealed that auditors overestimate their own and their subordinates' technical knowledge. Overconfidence in subordinates' knowledge becomes more pronounced with the increase in the knowledge gap between supervisors and subordinates. If supervisors better rated their own technical knowledge, a boost in their assessments of subordinates' knowledge would tend to be observed.

Employee performance appraisals, Performance appraisals

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Accountability effects on auditors' performance: the influence of knowledge, problem-solving ability, and task complexity

Article Abstract:

The relationship between auditor performance and accountability to a superior was examined with particular focus on how this link may be affected by knowledge, problem-solving ability and task complexity. It was predicted that accountability is most effective when the necessary knowledge and abilities are suited to the characteristics of the task. Specifically, the study tested the hypotheses that accountability will not improve performance for low-complexity tasks, that high accountability will improve performance for medium-complexity tasks if auditors have high knowledge, and that higher accountability will improve performance for high-complexity tasks if auditors have high knowledge as well as high problem-solving ability. Evidence was found supporting these hypothesis.

Financial Personnel, Performance, Problem solving, Financial occupations, Knowledge, Theory of, Epistemology

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Internal controls and the detection of management fraud

Article Abstract:

The auditor's fraud investigation decision was investigated in a setting in which the manager with exogenous incentives elects to trust the quality of internal controls even though these can be overriden regardless of their strength. The study makes three important contributions to the extant research literature: it identified conditions in which weak controls are preferred by managers with strong incentives to commit fraud, it demonstrated that auditors have incentives to propose internal controls that are not cost-effective for managers with integrity, and it showed that weak controls encourage auditors to exert less effort in fraud investigations, depending on the audit evidence.

Ethical aspects, Executives, Fraud investigation, Internal auditing

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