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Hypothesis Set (hypothesis + set)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Kinds of Hypothesis Set

  • initial hypothesis set
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    Selected Abstracts

    The Impact of Generating Initial Hypothesis Sets of Different Sizes on the Quality of the Initial Set, and the Resulting Time Efficiency and Final Judgment Accuracy

    INTERNATIONAL JOURNAL OF AUDITING, Issue 1 2004
    Sudip Bhattacharjee
    This study examines the impact of generating initial hypothesis sets of different sizes on the quality of the hypotheses generated (i.e., the ability to consider both the direction and accounts that are over- or understated). We also examine the time efficiency, information search effectiveness, and the final judgment accuracy, conditional on the quality of the initial hypothesis set. Sixty auditors performed an analytical procedures task where they were asked to generate and test either a specific number of initial hypotheses (one, three, or six), or any number of hypotheses desired in order to uncover an error seeded in the financial statements. The results indicate that the three hypotheses group initially generated hypotheses of the highest quality and maintained the hypothesis quality after efficiently searching information and generating additional causes. The one hypothesis group improved the quality of their hypotheses only after generating and testing several causes. However, auditors who generated six hypotheses or any number desired (as in audit practice) considered hypotheses of lower quality in the initial set, and did not improve the hypotheses quality after going through the information search stage. These results suggest that the size of the initial hypothesis set can lead to differences in the gains that accrue from the hypothesis generation and information search stages of diagnostic decisions. [source]

    A Note on the Interdependence between Hypothesis Generation and Information Search in Conducting Analytical Procedures,

    CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2003
    Stephen K. Asare
    Abstract This study examines the linkage among the initial hypothesis set, the information search, and decision performance in performing analytical procedures. We manipulated the quality of the initial hypothesis set and the quality of the information search to investigate the extent to which deficiencies (or benefits) in either process can be remedied (or negated) by the other phase. The hypothesis set manipulation entailed inheriting a correct hypothesis set, inheriting an incorrect hypothesis set, or generating a hypothesis set. The information search was manipulated by providing a balanced evidence set to auditors (i.e., evidence on a range of likely causes including the actual cause - analogous to a standard audit program) or asking them to conduct their own search. One hundred and two auditors participated in the study. The results show that auditors who inherit a correct hypothesis set and receive balanced evidence performed better than those who inherit a correct hypothesis set and did their own search, as well as those who inherited an incorrect hypothesis set and were provided a balanced evidence set. The former performance difference arose because auditors who conducted their own search were found to do repeated testing of non-errors and truncated their search. This suggests that having a correct hypothesis set does not ensure that a balanced testing strategy is employed, which, in turn, diminishes part of the presumed benefits of a correct hypothesis set. The latter performance difference was attributable to auditors' failure to generate new hypotheses when they received evidence about a hypothesis that was not in the current hypothesis set. This demonstrates that balanced evidence does not fully compensate for having an initial incorrect hypothesis set. These findings suggest the need for firm training and/or decision aids to facilitate both a balanced information search and an iterative hypothesis generation process. [source]

    The Impact of Generating Initial Hypothesis Sets of Different Sizes on the Quality of the Initial Set, and the Resulting Time Efficiency and Final Judgment Accuracy

    INTERNATIONAL JOURNAL OF AUDITING, Issue 1 2004
    Sudip Bhattacharjee
    This study examines the impact of generating initial hypothesis sets of different sizes on the quality of the hypotheses generated (i.e., the ability to consider both the direction and accounts that are over- or understated). We also examine the time efficiency, information search effectiveness, and the final judgment accuracy, conditional on the quality of the initial hypothesis set. Sixty auditors performed an analytical procedures task where they were asked to generate and test either a specific number of initial hypotheses (one, three, or six), or any number of hypotheses desired in order to uncover an error seeded in the financial statements. The results indicate that the three hypotheses group initially generated hypotheses of the highest quality and maintained the hypothesis quality after efficiently searching information and generating additional causes. The one hypothesis group improved the quality of their hypotheses only after generating and testing several causes. However, auditors who generated six hypotheses or any number desired (as in audit practice) considered hypotheses of lower quality in the initial set, and did not improve the hypotheses quality after going through the information search stage. These results suggest that the size of the initial hypothesis set can lead to differences in the gains that accrue from the hypothesis generation and information search stages of diagnostic decisions. [source]

    Design Considerations for Research on Analytical Procedures

    INTERNATIONAL JOURNAL OF AUDITING, Issue 3 2001
    Stephen K. Asare
    This article discusses research design considerations for conducting behavioral research on auditors' performance of analytical procedures (APs). With the trend in practice towards increasing reliance on APs, it is essential that auditors are proficient in completing such tests. Therefore, research to understand and improve auditors' performance of APs is important. Once an unexpected fluctuation is identified, APs involve three phases: generation of plausible hypotheses (likely causes); gathering evidence to examine plausible hypotheses; and identification of the most likely cause followed by appropriate follow-up actions. Although prior research has focused on these phases in isolation, they are, in fact, interrelated. Important research design issues and trade-offs for each of the phases of APs are discussed. For instance, in examining hypothesis generation there are choices as to the amount and nature of case background information, number of ratios or accounts to explain; ex-post evaluation of the quality of the hypothesis set; and instructions on number of causes that account for the fluctuation. Significant considerations are identified for making informed decisions among design choices. [source]

    The Impact of Generating Initial Hypothesis Sets of Different Sizes on the Quality of the Initial Set, and the Resulting Time Efficiency and Final Judgment Accuracy

    INTERNATIONAL JOURNAL OF AUDITING, Issue 1 2004
    Sudip Bhattacharjee
    This study examines the impact of generating initial hypothesis sets of different sizes on the quality of the hypotheses generated (i.e., the ability to consider both the direction and accounts that are over- or understated). We also examine the time efficiency, information search effectiveness, and the final judgment accuracy, conditional on the quality of the initial hypothesis set. Sixty auditors performed an analytical procedures task where they were asked to generate and test either a specific number of initial hypotheses (one, three, or six), or any number of hypotheses desired in order to uncover an error seeded in the financial statements. The results indicate that the three hypotheses group initially generated hypotheses of the highest quality and maintained the hypothesis quality after efficiently searching information and generating additional causes. The one hypothesis group improved the quality of their hypotheses only after generating and testing several causes. However, auditors who generated six hypotheses or any number desired (as in audit practice) considered hypotheses of lower quality in the initial set, and did not improve the hypotheses quality after going through the information search stage. These results suggest that the size of the initial hypothesis set can lead to differences in the gains that accrue from the hypothesis generation and information search stages of diagnostic decisions. [source]