The impact of the review process in hypothesis generation tasks

Article Abstract:

The performance of auditors in formulating hypotheses in an analytical review case is examined. The study seeks to determine the influence of the review process on the hypothesis-generation ability of the research participants. Two possible sources of gain from using the review process are proposed, namely the discussion effect and the rank effect. The former involves a comparison between a review group with discussion and a group without discussion, while the latter involves a comparison between senior executives and audit managers. The results show that the review process does improve the ability of auditors to generate plausible hypotheses. Findings also reveal that gain from the review process stems from discussion within the review process between reviewer and reviewee. No significant difference is found in the performance of senior executives and auditors.

Auditing, Problem solving

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The effect of information selection, information processing and task complexity on predictive accuracy of auditors

Article Abstract:

A study was conducted to investigate the role of auditors' information selection and processing in the assessment of the quality of their decisions. One hundred auditors participated in an experiment wherein they given financial profiles for 30 companies and asked to predict whether the profiled companies would go bankrupt and to assess the probability that their predictions were correct. The participants were divided into five groups with different experimental conditions created by crossing information selection and information processing by information load. The findings indicate that information selection serves to limit evaluation of the auditor's predictive accuracy, and that information processing constrained decision-making in the higher information selection.

Accounting, auditing, & bookkeeping, Accounting & Auditing Services, Accounting, Tax Preparation, Bookkeeping, and Payroll Services, Decision-making, Decision making, Human information processing, Prediction (Logic)

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