Thesis (Ph. D.)--University of North Texas, Dec., 2009. / Title from title page display. Includes bibliographical references.

Thesis (Ph.D.)--University of Melbourne, Dept. of Accounting and Business Information Systems, 2006. / Typescript. Includes bibliographical references (leaves 213-229).

Thesis (Ph.D.)--University of Nebraska-Lincoln, 2006. / Title from title screen (site viewed on Nov. 2, 2006). PDF text: iii, 86 p. ; 3.21Mb. UMI publication number: AAT 3214106. Includes bibliographical references. Also available in microfilm and microfiche format.

Auditors form judgments by integrating the evidence they gather with information stored in memory (knowledge). As they acquire experience, auditors have the opportunity to learn how different patterns of evidence are associated with particular audit problems. Research in experimental psychology has demonstrated that individuals with task-specific experience can match the cues they encounter with patterns they have learned, and form judgments without consciously analyzing the individual cues. Accounting researchers have suggested that auditors develop judgment templates through task-specific experience, and that these knowledge structures automatically provide decisions in familiar situations. I examined whether auditor knowledge leads to reliance on judgment templates. To test this thesis, I synthesized a theoretical framework and developed research hypotheses that predict relationships between task-specific experience (my surrogate for knowledge) and (1) measures of cognitive effort, (2) accuracy of residual memory traces, and (3) performance with respect to identifying potential problems. To test these predictions, I provided senior auditors with comprehensive case materials for a hypothetical client and asked them to use analytical procedures to identify potential audit problems. Subjects acquired information and documented their findings on personal computers using software that I developed to record their activities.

An auditor performing analytical review must typically diagnose material variances of observed client data from his/her own expectations. The auditor may utilize a decision aid to help in generating potential explanations for a variance; it has, however, the capacity to provide many more explanations than are possible using other means. Under the circumstances of budgetary constraints and limited cognitive load for beginning an information search with these explanations, the auditor may consider the lengthy list and arrive at a more manageable sub-list of the most probable explanations. In doing so, the auditor either eliminates those explanations that are less likely or includes those that are more likely into a reduced list for further consideration. While the goal under either approach is the same-to reduce the list-studies in psychology have shown that those including will reduce the list to a much greater extent than those eliminating. If the auditor begins an information search with this reduced list of explanations, then whether the auditor uses inclusion or elimination may have effectiveness and efficiency implications for the remainder of the analytical review process. The auditor must also contend with risk in the audit environment, which also may influence the manner in which the auditor reduces the lengthy list of explanations. A risky audit environment is generally related to heightened auditor skepticism and increased audit effort, as predicted by the audit risk model (SAS 47, AICPA 1983). Each of these translates into the desire to pursue a greater number of plausible explanations in a high risk environment than in a low risk environment. Therefore, an auditor would be expected to reduce a decision-aid-provided list of explanations to a lesser degree in a high risk environment than a low risk environment. The purpose of this dissertation was to investigate the occurrence of a goal framing effect at varied levels of client risk. Using a two-way between subjects design, auditors in this study either eliminated or included explanations from a decision-aid-provided list in a low risk or high risk analytical review setting. As suggested by the goal framing theory, auditors who eliminated concluded with significantly more explanations than those who included. Furthermore, as suggested by the audit risk model, auditors in a high risk environment concluded with significantly more explanations than auditors in a low risk environment. Because previous auditing literature provides that auditor conservatism, which is heightened in periods of high risk, often mitigates biases and heuristics found in the general decision making or psychology literature, it was also predicted that in the high risk scenario, the influence of high risk in enlarging the set of explanations would overcome the influence of the inclusion goal framing in reducing the set of explanations. No support was found for this interaction. The results of this study have implications for the implementation of decision aids in practice. This study advises that in various client risk settings, auditors evaluating a lengthy decision-aid-provided list of explanations by inclusion may arrive at a significantly smaller number of explanations than by elimination. Given that the subsequent step of analytical review-information search-is planned according to what the auditor believes are the plausible hypotheses, goal framing may have an impact on the overall efficiency and effectiveness of analytical review, in both high and low risk client scenarios. / Ph. D.

Auditors use substantive analytical procedures to make assertions about the adequacy and appropriateness of client balances. The analytical procedure process consists of auditors creating independent account expectations and corroborating unusual fluctuations through obtaining and evaluating additional audit evidence. Prior analytical procedure research has found that knowledge of clients' unaudited account balances biases auditors' expectations towards the current year figures. However, this research has failed to examine the impact of biased expectations on the subsequent stages of analytical procedures. This dissertation assesses the full impact of biased account expectations on auditors' use of analytical procedures. I experimentally test the hypotheses of my dissertation through administering an experiment to senior level auditors. After inducing an account expectation bias that favors the client account balance in half the participants, I examine the auditors' cognitive investigation into an unusual account fluctuation. The results indicate that a biased account expectation negatively affects auditors' judgment quality. In particular, a biased expectation leads auditors to favor hypotheses and additional information that supports the proposition that the client's balance is reasonably stated. Alternatively, auditors with unbiased account expectations are more willing to consider all hypotheses and are able to identify the most pertinent additional information to the decision task. As a result of the different decision strategies employed, auditors who form unbiased account expectations are significantly more likely than auditors with biased account expectations to identify the correct relationship among the underlying data and the proposed hypotheses during a substantive analytical procedure.

В настоящей выпускной квалификационной работе «Исследование процесса удаления серы из полупродукта на установке десульфурации в условиях АО «ЕВРАЗ НТМК» рассмотрено распределение серы по переделам металлургического производства АО «ЕВРАЗ НТМК» а также проведена работа по повышению стойкости фурмы установки десульфурации чугуна. / In this final qualifying work " Study of the process of removing sulfur from a semi-product at a desulfurization plant in the conditions of JSC "EVRAZ NTMK", the distribution of sulfur in the metallurgical production processes of JSC" EVRAZ NTMK " is considered, and work is also carried out to improve the durability of the tuyere of the pig iron desulfurization plant.

There is considerable evidence in the audit literature that even though auditors usually identify the relevant information needed to propose and select the correct cause of an unexpected fluctuation, they frequently do not propose the correct cause, and even when they do propose the correct cause, they often fail to select it. I suggest that working memory limitations might be a factor contributing to this analytical review paradox. Consequently, this study investigates whether two new decision aids, designed from Cognitive Load Theory, reduce auditors' cognitive load during analytical review, freeing cognitive resources for problem solving, and ultimately leading to improved auditor analytical review effectiveness. My first decision aid, an activity relationship diagram (ARD), gives the auditor a graphical depiction of common accounting relationships. My second decision aid, a pattern-consideration aid (PCA), automatically recalls and textually displays the auditor-identified relevant information cues. In an experimental setting, I find that auditors who rely on either decision aid significantly improve their analytical review effectiveness compared to auditors who conduct analytical review unaided. However, contrary to my predictions, auditors who rely on both decision aids do not outperform auditors who rely on only one decision aid. Although I find empirical evidence that cognitive load is negatively related to analytical review effectiveness, I do not find evidence that my decision aids reduce cognitive load.

Audit evidence enables the auditor to express an opinion on the financial statements. To address the risk that the auditor may express an inappropriate opinion, the nature, timing and extent of audit procedures must be responsive to the assessed risks of material misstatement. The auditor must aggregate the levels of assurance obtained from different combinations of tests of controls, substantive analytical procedures and tests of details to respond to the assessed risks. These evidence planning decisions are complex and require professional judgement. Research has found that the extent of audit procedures is not linked to the assessed risks and that auditors may not know to aggregate evidence from different types of audit procedures. Research also supports the use of a structured audit methodology that includes decision models, to guide the application of professional judgement. This leads to the overall objective of this study: the development of an integrated audit evidence planning model to quantify the extent of audit evidence. The study employs a grounded theory model building approach, interpreting the relevant concepts and principles from the literature review into the development of the model. The integrated audit evidence planning model quantitatively relates the extent of audit evidence in a logical and structured manner with the risk assessment and three distinct overall levels of assurance needed to support the audit opinion. It uses the cumulative nature of audit evidence and the compensatory inter-relationship between tests of controls, substantive analytical procedures and tests of details to quantitatively aggregate the extent and levels of assurance from the different combinations of procedures to obtain reasonable assurance at the required overall level of assurance. The model provides a framework for influencing and guiding the exercise of professional judgement and is a practical and effective tool to benefit the users thereof when conducting an audit. Thus, the study models the extent of audit evidence with reference to the aggregation of different types and combinations of evidence and the linkage between the risk assessment and the extent of evidence that provides a flexible framework for the application of professional judgement regarding the gathering of audit evidence. / Auditing / D. Com. (Auditing)

Audit evidence enables the auditor to express an opinion on the financial statements. To address the risk that the auditor may express an inappropriate opinion, the nature, timing and extent of audit procedures must be responsive to the assessed risks of material misstatement. The auditor must aggregate the levels of assurance obtained from different combinations of tests of controls, substantive analytical procedures and tests of details to respond to the assessed risks. These evidence planning decisions are complex and require professional judgement. Research has found that the extent of audit procedures is not linked to the assessed risks and that auditors may not know to aggregate evidence from different types of audit procedures. Research also supports the use of a structured audit methodology that includes decision models, to guide the application of professional judgement. This leads to the overall objective of this study: the development of an integrated audit evidence planning model to quantify the extent of audit evidence. The study employs a grounded theory model building approach, interpreting the relevant concepts and principles from the literature review into the development of the model. The integrated audit evidence planning model quantitatively relates the extent of audit evidence in a logical and structured manner with the risk assessment and three distinct overall levels of assurance needed to support the audit opinion. It uses the cumulative nature of audit evidence and the compensatory inter-relationship between tests of controls, substantive analytical procedures and tests of details to quantitatively aggregate the extent and levels of assurance from the different combinations of procedures to obtain reasonable assurance at the required overall level of assurance. The model provides a framework for influencing and guiding the exercise of professional judgement and is a practical and effective tool to benefit the users thereof when conducting an audit. Thus, the study models the extent of audit evidence with reference to the aggregation of different types and combinations of evidence and the linkage between the risk assessment and the extent of evidence that provides a flexible framework for the application of professional judgement regarding the gathering of audit evidence. / Auditing / D. Com. (Auditing)