Using Audit Programs to Improve Auditor Evidence Collection

• In Event: Behavioral Audit Research

Abstract

Auditors experience difficulty when auditing accounts on which it is difficult to identify in advance all the evidence necessary to perform an effective audit (Griffith et al. 2015b). Accounts such as estimates or accounts with elevated fraud risk fit this category because auditors must remain flexible and collect additional, relevant evidence in response to new information received during evidence collection. In this study, we experimentally examine whether changing the focus of audit programs from plan-focused (i.e., focused on the particular audit procedures to be completed) to goal-focused (i.e., focused on the task goal) improves auditors’ collection of relevant evidence that is not identifiable when the audit program is created. Our theory suggests that focusing on a general goal, which allows auditors to remain open to a broad set of ways to achieve the goal, is more effective than focusing on a specific plan when relevant evidence needed to achieve the goal cannot be specified in advance. We provide all auditors with the same information about their task goal and planned procedures. We find that auditors who use goal-focused audit programs collect more effective evidence than auditors who use plan-focused audit programs and follow-up more effectively on this evidence. Our study suggests that a goal-focused approach leads to improvements in audit quality on tasks that require auditors to flexibly respond to new information.

Authors

• Jacqueline S Hammersley, University of Georgia

• Michael Ricci, University of Georgia