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Audit Tasks (audit + task)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

The Impact of Internal Auditor Compensation and Role on External Auditors' Planning Judgments and Decisions,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2001
F. Todd Dezoort
Abstract This paper reports the results of an experiment that investigates how external audit planning is affected when internal auditors have incentives and the opportunity to bias their evaluations. Specifically, we draw on attribution theory to examine how internal auditor eligibility for incentive compensation and participation in consulting (i.e., two factors that provide incentives to bias audit evaluations) affect external audit planning. In addition, we examine the effects of incentive compensation and a consulting role across two routine internal audit tasks , an objective tests of controls task and a subjective inventory valuation task , to evaluate whether their effects are contingent upon task subjectivity (i.e., opportunity to bias audit evaluations). Seventy-six external auditors from four Big 5 public accounting firms participated in an experiment that manipulated internal auditor compensation (fixed salary versus incentive compensation), the type of work that the internal auditors routinely perform (primarily auditing versus primarily consulting), and audit task subjectivity (objective tests of controls versus subjective inventory valuation). Our results suggest that the nature of internal auditors' compensation and work affect audit planning recommendations differently. The opportunity to receive incentive compensation results in less reliance on internal auditors' work and greater budgeted audit hours, but only for the subjective task. Although a consulting role decreases perceived internal auditor objectivity, it has a limited effect on planning recommendations. Specifically, consulting has no effect on reliance, and leads to greater budgeted audit hours only when incentive compensation is available. We discuss potential explanations for the results as well as implications for audit research, practice, and regulation. [source]

Multiple hypothesis evaluation in auditing

ACCOUNTING & FINANCE, Issue 3 2002
Rajendra P. Srivastava
In many audit tasks, auditors evaluate multiple hypotheses to diagnose the situation. Research suggests this is a complex task that individuals have difficulty performing. Further, there is little guidance in professional standards or literature dealing with the many complexities present in the audit environment. Using probability theory, this study derives the appropriate revision of likelihoods for multiple hypotheses given different realistic audit conditions. The analysis shows that the relationships among the hypotheses dramatically impact the use of audit evidence and the resulting pattern of probability revisions. We also identify testable hypotheses to guide future research and discuss practice implications regarding ways to improve the effectiveness of analytical procedures. [source]

An examination of order effects in auditors' inherent risk assessments

ACCOUNTING & FINANCE, Issue 2 2000
Gary Monroe
While recency effects have been reported in a variety of audit tasks, recent studies suggest that these effects may be mitigated under certain conditions. The importance of investigating order effects in auditors' judgments rests with its potential to impact on the efficiency and effectiveness of audits. Since current studies suggest that recency effects may not impact on all audit situations, it is necessary to identify conditions or variables in the task environment that either induce or mitigate recency. This study examines the occurrence of order effects in auditors' inherent risk assessments, a task not previously examined. Using a case study administered to 70 auditors, this study found that auditors' judgments were not influenced by the order in which audit evidence was evaluated. Rather, the results suggest that judgments of inherent risk may be biased towards conservatism. This may not be surprising given the negative consequences associated with failing to adequately plan an audit. This may cause auditors to act cautiously and thus mitigate recency effects. [source]

Information and Communications Technology and Auditing: Current Implications and Future Directions

INTERNATIONAL JOURNAL OF AUDITING, Issue 2 2010
Kamil Omoteso
This exploratory study assesses, from a structuration theory perspective, the impact information and communications technology (ICT) tools and techniques are currently having on audit tasks, auditors (internal and external) and the organisations they work for from the point of view of coordination, control, authority and structure. Based on a triangulation of interview and questionnaire techniques, the findings indicate that ICT is re-shaping auditors' roles and outputs as well as audit organisations' structures. The findings also project the view that continuous auditing, artificial intelligence and CobiT are expected to gain more prominence while a need was also seen for new software development to help auditors match the complexity of their clients' information systems. The study's results reveal the current state of affairs of the relationship between ICT and auditing against the backdrop of continuous global ICT sophistication thereby updating ICT audit literature and the likely future direction of this relationship. [source]