This paper examines the performance of auditors in generating hypotheses in an analytical review case both prior to and after review. It partitions two possible sources of gain from the review process, namely the discussion effect and the rank effect. The discussion effect compares review groups with and without discussion. The rank effect compares seniors and audit managers. The study found that the review process results in more plausible hypotheses being generated. Discussion within the review process between reviewer and reviewee was found to be one source of gain from the review process. While there was no difference in the performance of the senior and manager reviewers, managers completed the task in less time.

This experiment examines whether there are systematic offsetting differences in the manner in which initial decision makers and reviewers attend to information which ensure that evidence inconsistent with initial judgments is given adequate consideration. Differences in attention are proposed, which result in differential recall of evidence by the initial decision maker and reviewer and thus influence what knowledge initial decision makers and reviewers bring to their discussions and subsequent decisions. The results suggest that the review process can act as an effective control by increasing the chances that the implications of inconsistent evidence are considered.