What Did the Client Say? The Impact of Note Taking on Auditor Memory of a Client Inquiry

• In Event: Auditor - Client Communication

Abstract

Client inquiry is a fundamental procedure for gathering audit evidence and is one of the most used audit procedures. Since inquiries are not audio recorded in practice, audit professionals often make hand-written or typed notes during client inquiries, and subsequently review the notes, which may affect memory (Fisher and Harris 1973; Godwin 1979). Auditor memory is vital to the accuracy of evidence gathered in this manner due to the potential for error during memory encoding and retrieval (Moeckel 1990), the effect of memory on judgment (Libby 1995), and the cognitive complexity of conducting a face-to-face inquiry. Little research has examined this issue and no standards provide guidance on performing a client inquiry.

We design and execute a video-based experiment to examine the impact of note taking on auditor memory accuracy of a client inquiry, and examine qualities of auditor notes. Using 73 professional auditors, we find evidence that note taking hinders memory accuracy of a client inquiry, which in turn impacts judgment. Additionally, we find that how an auditor takes notes impacts his or her memory accuracy of a client inquiry. Implications of these findings are discussed.

Authors

• Jeremy Vinson, Clemson University

• Jesse C Robertson, University of North Texas

• Mary B Curtis, University of North Texas