Reporting uncertainty and assessment of risk: replication and extension in a Canadian setting

Article Abstract:

The risk of introducing uncertainty and confusion in the minds of readers of audit reports on which the accountants have issued a 'subject-to' (or qualified) opinion has caused the American Institute of Certified Public Accountants' Commission on Auditors' Responsibility to recommend the elimination of subject-to opinions. However, a study performed by R. Libby in 1979 using a sampling of 36 bankers found that subject-to opinions on audit reports did not affect bank executives' assessment of risk or degree of uncertainty. A replication of Libby's research, using a sampling of Canadian bankers (for whom the subject-to opinion has been eliminated since 1980), finds that: while bankers do consider auditing disclosures of uncertainty relevant to bank management, they are not affected by the inclusion of subject-to opinions in the audit reports.

DEPOSITORY INSTITUTIONS, Social aspects, Management, Canada, Risk (Economics), Financial statements, Corporation reports, Company reports, Disclosure statements (Accounting), Uncertainty

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Discussion of an experimental investigation of auditor-auditee interaction under authority

Article Abstract:

A discussion of an experimental study of auditor and auditee behavior under conditions of ambiguity is presented. Most behavioral studies in auditing test for psychological rather than economic forces, but the experiment reviewed manipulates and tests for both. Auditing is a natural setting for investigating both psychological and economic theories. A detailed description of the experimental design and evaluation of the authors' predictions is included.

Science & research, Economics, Psychological aspects, Economic research

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The role of decision strategies in understanding professionals' susceptibility to judgment biases

Article Abstract:

Issues concerning judgments accountants make are examined, focusing on the relationship between approaches to judgments and the methods by which the judgments are evaluated. Topics include control over evidence order, judgment task structuring ability, and decision context.

Management Science, Statistical Data Included, Business planning

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