This study investigates whether, in some audit tasks, less experience is required for superior cue measurement than for other components of those tasks and, thus, the overall tasks. Hypotheses are developed based on a consideration of the knowledge needed to perform cue measurement and of how and when that knowledge is acquired. An experiment examined the effects of experience and cue measurement on assessments of control risk and analytical risk. Results indicate that, as predicted, there are experience‐related differences in global analytical risk assessments, but those differences are not attributable to differential knowledge about cue measurement. Résumé. La question sur laquelle se penche l'auteure est de savoir si, dans certaines tâches de vérification, l'expérience nécessaire à une mesure supérieure de certains indicateurs est moins grande que celle que nécessitent d'autres aspects de ces tâches et, par conséquent, l'ensemble des tâches de vérification. Ses hypothèses se fondent sur la détermination des connaissances nécessaires pour procéder à la mesure des indicateurs ainsi que du mode et du moment d'acquisition de ces connaissances. Dans le cadre d'une expérimentation, elle analyse les effets de l'expérience et de la mesure des indicateurs sur l'évaluation du risque de non‐contrôle et du risque analytique. Les résultats obtenus révèlent que, conformément aux prévisions, il existe des différences liées à l'expérience dans l'analyse globale du risque analytique, mais que ces différences ne sont pas attribuables aux connaissances marginales relatives à la mesure des indicateurs.

Previous studies concerning experience effects in audit judgments have produced mixed results, possibly because they did not consider the knowledge necessary to complete the task and when it would normally be acquired. Further, many studies did not view the global judgment process as consisting of several components, e.g., cue selection. Task-specific knowledge may aid the performance of experienced auditors more in some components than in others. Not considering task-specific knowledge or viewing the judgment process as being comprised of components may have led to certain problems in generalizing the results of these studies to other auditing tasks. Those problems are addressed in the design of this study, which examines experience effects, specifically the role of task-specific knowledge, in the cue selection and cue weighting components of two audit tasks, analytical risk assessment and control risk assessment. Results indicate that task-specific knowledge aided the performance of experienced auditors in both the cue selection and cue weighting components only in analytical risk assessment.

[Previous studies concerning experience effects in audit judgments have produced mixed results, possibly because they did not consider the knowledge necessary to complete the task and when it would normally be acquired. Further, many studies did not view the global judgment process as consisting of several components, e.g., cue selection. Task-specific knowledge may aid the performance of experienced auditors more in some components than in others. Not considering task-specific knowledge or viewing the judgment process as being comprised of components may have led to certain problems in generalizing the results of these studies to other auditing tasks. Those problems are addressed in the design of this study, which examines experience effects, specifically the role of task-specific knowledge, in the cue selection and cue weighting components of two audit tasks, analytical risk assessment and control risk assessment. Results indicate that task-specific knowledge aided the performance of experienced auditors in both the cue selection and cue weighting components only in analytical risk assessment.]

In this study, we explore a view of expertise in which specific experiences and training create knowledge, and knowledge is combined with innate ability to perform specific audit tasks. Specifically, we test the extent to which we can explain cross-sectional variation in auditors' performance in several audit tasks using various types of knowledge and ability measures that have been identified in the psychology literature as important determinants of auditor expertise. We compare these results to the explanatory power of a simple measure of general audit experience. Our results indicate that, although more experienced auditors outperform less experienced auditors on average (and given our performance criteria), knowledge and innate ability provide a better explanation of variation in performance. Part of the motivation for this paper is to distinguish between general and expertise in the performance of information-processing tasks. Early studies of human information processing in accounting examined the effect of on performance in audit tasks (see, for example, Ashton and Brown [1980], Hamilton and Wright [1982], and Messier [1983]). Implicit in this research is the notion that . . a primary determinant of improved expertise ... is experience (Hamilton and Wright [1982, p. 757]). The reasoning behind this notion is that knowledge can be gained through and many audit tasks are knowl-

[Libby (1993) suggests a simple model of the acquisition of expertise where knowledge and ability determine performance, and instruction, experience, and ability determine the acquisition of knowledge. An important implication of the model is that a detailed understanding of the knowledge acquisition process is needed before the practical implications of expertise research are evident (see also Bonner and Pennington 1991; Waller and Felix 1984). Libby's review indicates, however, that the vast majority of studies of the knowledge acquisition process focus on what knowledge auditors acquire during a particular period of time with the firm, but not on what particular aspects of instruction and experience lead to superior knowledge.1 The latter type of study is necessary before firms can determine how best to organize auditors' training and experiences to allow efficient and effective acquisition of the necessary knowledge. The importance of analytical procedures in auditing and the popularity of ratio analysis as an analytical procedure are well-documented (e.g., Biggs and Wild 1984; Libby 1985). The current study focuses on the knowledge necessary to perform ratio analysis in audit planning. Specifically, we examine the effectiveness of various combinations of instruction and experience (practice and feedback) in producing this knowledge. The results indicate that combinations of instruction and no experience or of instruction and practice without feedback do not produce knowledge. Practice with explanatory feedback and any form of instruction creates gains in knowledge, but may not always be available in the audit environment. Practice with outcome feedback, on the other hand, does not assist in the acquisition of knowledge unless it is preceded by instruction with what we have labeled "understanding rules," making this combination appear to be an adequate substitute for explanatory feedback. Practice with outcome feedback combined with what we call "how-to rules" does not promote knowledge acquisition. Finally, results indicate that ability aids in the acquisition of knowledge, and that this knowledge is related to performance in ratio analysis. These findings have implications for audit effectiveness and efficiency, and for education and firm training related to ratio analysis. If explanatory feedback can be replaced by a combination of understanding rules and practice with outcome feedback, audit efficiency could be increased since explanatory feedback takes more time and more experienced personnel. Explanatory feedback may also be inaccurate or unavailable, particularly under conditions of time pressure. However, if only outcome feedback is to be provided for ratio analysis, understanding rules must be incorporated into education and training. For the most part, firm training and university education currently provide only how-to rules for ratio analysis (see Bonner and Pennington 1991; Ernst & Whinney 1986). The ideas described above could also be extended to tasks other than ratio analysis for which outcome feedback is available (Solomon and Shields 1993).]

Focuses on the knowledge necessary to perform ratio analysis in audit planning. Effects of instruction and experience on knowledge acquisition; Effects of abilities in knowledge acquisition; Effects of knowledge and abilities on performance; Examination of Libby's model.

Risk assessment is a critical audit task, as auditors’ accuracy therein affects audit effectiveness and financial reporting quality, as well as audit efficiency. We propose that risk assessment accuracy for client risks that have changed from the prior year is affected by the manner in which auditors access prior year risk assessments, specifically whether they face a default option created by the prepopulation of current year workpapers with those assessments. We find that auditors with prepopulated (vs. blank) workpapers are less accurate for risks that have changed because they are more likely to stick with last year's assessments, and also to work fast. We then show that auditor characteristics reflecting a preference for accuracy reduce, but do not eliminate, these effects. Finally, we provide exploratory evidence that sticking and working fast are associated with, respectively, motivated reasoning and superficial processing. Collectively, these findings suggest the critical need for an intervention, and also have implications outside auditing.

[Prior research indicates that auditors encounter difficulty in applying experienced error frequencies to judgments of the probability that an audit objective is violated given a particular transaction cycle. This difficulty may occur because of a mismatch between the organization of this particular judgment task and the organization of auditors' knowledge. We test the effectiveness of two decision aids at counteracting this difficulty: (1) a checklist aid which facilitates knowledge retrieval and (2) a decomposition-and-mechanical-aggregation aid which facilitates both knowledge retrieval and aggregation. The checklist aid slightly improved the degree to which auditors' judgments reflected experienced frequencies and the mechanical-aggregation aid greatly improved auditors' judgments, completely counteracting the effect of the task organization-knowledge organization mismatch.]