Auditing, Internal controls, Audit judgement, Human information processes

This study examines the effect of specialization at the different stages of an audit workpaper review. Auditing literature advises focusing each review level on specific kinds of errors (i.e., seniors on mechanical errors and managers on conceptual errors), rather than having seniors and managers perform successive all‐encompassing reviews. However, surveys of review practice suggest that all‐encompassing reviews are common. To determine whether specialization at different levels of review improves reviewers' overall effectiveness, this study has 35 managers and 39 seniors actually perform a review of a realistic set of workpapers. Half the subjects performed specialized reviews, whereas the other half performed all‐encompassing reviews. Overall accuracy rates in our study are consistent with prior research. In addition, the combined reviews of seniors and managers are more effective than those of either seniors or managers separately, demonstrating the benefits of hierarchical review. However, specialized review leads reviewers to be significantly less accurate than reviewers performing all‐encompassing reviews. The results suggest specialization will not automatically improve review effectiveness, and that accounting firms may need to re‐evaluate their review guidance and professional training on workpaper reviews.

Résumé. Cette étude se penche sur l'effort en terme de temps de révision des chefs de groupe en vérification (tel que reflété par leurs estimations du temps requis pour la révision du dossier de vérification) et la mesure dans laquelle cet effort est orienté par une autre activité importante du chef de groupe: la planification initiale de la mission de vérification. La planification initiale de la vérification est conditionnée par l'identification de certaines zones critiques dans la note de planification. Les pressions temporelles et les caractéristiques individuelles du vérificateur sont également étudiées, car les recherches antérieures en vérification semblent indiquer qu'elles sont susceptibles d'influencer la révision du chef de groupe. Cette analyse est fondée sur les réponses, provenant de soixante‐treize chefs de groupe de dix grands cabinets d'experts‐comptables, à un cas de vérification. Les résultats indiquent que: 1) les chefs de groupe font preuve d'un consensus raisonnable en budgétisant plus de la moitié du temps de vérification pour la révision, 2) le plan initial de vérification oriente leur révision ultérieure, 3) les pressions au niveau du temps n'influencent pas de façon significative leurs estimations relatives au temps de révision, et 4) l'appartenance à un cabinet, le niveau d'expérience de vérificateur, et l'effort de planification initiale sont reliés aux différences des pratiques et des perceptions de la révision par le chef de groupe. La fin de cet article comporte une discussion des conséquences de ces résultats en regard de la pratique et des recherches ultérieures.

This study examines audit managers' review time effort (as reflected in their time estimates for working paper review) and the extent to which this effort is directed by another important audit manager activity: initial audit planning. Initial audit planning is manipulated by identifying certain audit areas as critical in the planning memo. Time pressure and individual auditor characteristics also are examined because auditing literature suggests that they may affect managers' review. The analysis is based on the responses, to an audit case, of 73 audit managers from ten large accounting firms. The results indicate that: 1) the managers exhibit reasonable agreement in budgeting over half of audit management time to review, 2) the initial audit plan directs their subsequent review, 3) time pressure does not significantly affect their estimated review times, and 4) firm affiliation, auditor experience level, and initial planning effort are associated with differences in managers' review practices and perceptions. The paper concludes with a discussion of the implications of these results for practice and further research.

[This study was designed to provide empirical evidence on the effects of audit structure on audit judgments. Specifically, the study examined differences between structured and unstructured audit methods in terms of judgment consensus and auditors' use of coordination and control mechanisms, under different degrees of task uncertainty. A field experiment was conducted involving 113 audit seniors from four firms: two from each end of an audit structure scale. Contrary to expectations, auditors from structured firms did not exhibit uniformly greater consensus in their judgments. However, relative to unstructured firms' auditors, the auditors from structured firms exhibited a greater propensity to increase their use of certain control and coordination mechanisms (especially consultation with peers and audit managers) as the level of task uncertainty increased.]

This study was designed to provide empirical evidence on the effects of audit structure on audit judgments. Specifically, the study examined differences between structured and unstructured audit methods in terms of judgment consensus and auditors' use of coordination and control mechanisms, under different degrees of task uncertainty. A field experiment was conducted involving 113 audit seniors from four firms: two from each end of an audit structure scale. Contrary to expectations, auditors from structured firms did not exhibit uniformly greater consensus in their judgments. However, relative to unstructured firms' auditors, the auditors from structured firms exhibited a greater propensity to increase their use of certain control and coordination mechanisms (especially consultation with peers and audit managers) as the level of task uncertainty increased.

Reviews the book "An Experimental Study of Review of Preliminary Audit Strategy by External Auditors," by J. E. Boritz, B. G. Gaber and W. M. Lemon.

Reviews the book "Accounting Students and Abstract Reasoning: An Exploratory Study," by George E. Shute.