The impact of hypothesis set size on the time efficiency and accuracy of analytical review judgments

Article Abstract:

The accuracy and time efficiency of the analytical review judgments of auditors faced with hypothesis sets of different sizes were examined. The study involved 60 auditors who were asked to examine fluctuations in a client's financial statements and who were grouped into three, with each forming and testing one, three or six hypotheses. The findings indicate an important relationship between hypothesis set size and the audit review's accuracy and efficiency. The auditors testing only one hypothesis at a time tested the smallest number of hypotheses, and therefore run the risk of not including the correct hypothesis in their hypothesis set. The auditors testing six hypotheses formulated the most number of hypotheses and allotted the least time in evaluating each hypothesis. They were also found to have lower accuracy. The auditors who tested three hypotheses proved to have the highest decision accuracy among the three groups.

Judgment, Judgment (Psychology), Statistical hypothesis testing

---

The impact of analytical review results, internal control reliability, and experience on auditors' use of analytical review

Article Abstract:

The extent to which data results from an analytical review influences auditors modifications' to audit plans was tested by analyzing the behavior of 96 auditors in realistic task settings. Research considered auditor experience, reliability of the internal control system, and the presence or lack of of errors. Research results indicate that analytic review findings and internal control reliability significantly affect auditors' modifications of planned audit work. The majority of auditors extended audit testing as a result of an analytic review that signaled problems and were hesitant to reduce testing below the preliminary audit plan when the analytic review indicated no problems. In the area of experience, the most important variable for managers were the analytic review procedures, while the most important variable for senior auditors was the reliability of internal control.

---

Determinants of auditor expertise

Article Abstract:

The determinants of auditors' expertise, knowledge generated by training and specific experiences combined with innate skill to perform certain audit tasks, was researched. Previous research has revealed differences in auditor expertise related to differences in knowledge, including general domain knowledge, sub-specialty knowledge, and world knowledge. A key innate skill that accounts for differences in auditor performance is problem-solving ability. Research results indicate that knowledge and innate skill rather than experience are the major causes of performance variations between experienced and less experienced auditors.

Similar abstracts:

• Abstracts: The impact of franchising on the financial performance of small firms. Planning and financial performance of small, mature firms
• Abstracts: The perils of high-growth markets. Strategy over the business cycle. Mobility barriers and strategic groups
• Abstracts: The best place to do business? Accountants stand by as East meets West. Getting down to business
• Abstracts: Internal control over the treasury function. Corporate treasuries and the euro. Your banks, and how to chose them
• Abstracts: The ASC's version of group therapy. Exposure Draft 48 - February 1990: Accounting for Acquisitions and Mergers

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.