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During an audit, if an audit team does not have sufficient knowledge when auditing a complex issue they often call upon subject matter experts to provide advice. While these experts are the knowledge experts in their area, the quality of the advice depends upon their ability to fully understand and incorporate client specific facts. PCAOB inspection reports suggest that audit teams are neglecting to perform the required work to assess the quality of experts' recommendations. Additionally, the decision to use subject matter experts can be made during planning or when a complex issue surfaces during the audit. As such, auditors may or may not be a priori aware that an expert's use is planned before auditing a complex issue. In this dissertation, I examine how receiving advice of different levels of quality in terms of whether it incorporated all relevant client facts (lower or higher), and a priori awareness of the use of a subject matter expert (aware or unaware), can impact auditors' use of the advice and the resulting effort and judgment accuracy. I conducted a computerized experiment where professional auditors read a case study and made an initial judgment around a complex issue, received advice, and then made a final judgment. Based on advice-taking literature, I predict and find support that auditors who are a priori unaware of the use of a subject matter expert will employ lower effort in understanding the client facts and thus be less discerning and more accepting of the advice received. Being a priori unaware and receiving low quality advice can lead to lower judgment accuracy than receiving high quality advice with a priori unawareness. Auditors who are a priori aware are expected to, and found to employ greater effort, thus reducing the accuracy differences between receiving high and low quality advice. These findings can help improve the professions' understanding of auditors' advice taking behavior and the conditions under which expert advice is accepted without performing the required quality assessment. / Ph. D.

Does social similarity between the auditor and a specialist induce social biases that impair the auditor's reliance on the specialist? It is important to examine potential impairments to reliance since auditors do not possess expertise in many of the areas examined during the audit. One type of specialist that is increasingly relied upon by the auditor is the IT specialist. Since firms have two approaches to the organization of IT personnel (decentralized vs. centralized) and often use professional designations as a hiring criteria for specialists, I examine two dimensions of social similarity: domain knowledge distinctiveness and spatial distance. Using a 2 × 2 experiment manipulating the IT specialist's domain knowledge distinctiveness (distinct vs. overlapping) and spatial distance (in-house office location vs. outsourcing from another office) relative to the auditor, I investigate financial auditors' reliance on IT specialists. My findings provide evidence of a boundary condition to the widely accepted social identity theory. Specifically, when specialists (IT specialists in this study) are outsourced, marginally less reliance is placed on specialists possessing overlapping (shared) domain knowledge relative to distinct domain knowledge. Additionally, I find evidence of a "consultant effect" in which greater auditor reliance is placed on IT specialists from other offices when the IT specialist possesses distinct domain knowledge relative to the financial auditor. Findings suggest that a broader theory of social similarity in which dimensions of social similarity can interact to produce social biases appears to be more descriptive of real-world social complexities than social identity theory.

In the wake of recent corporate accounting scandals, auditors are encouraged to improve their method of fraud detection. Although Statement on Auditing Standards (SAS) No. 99 does not change the responsibility of the auditor for detecting fraud, it does provide new procedural requirements for assessing fraud risk, such as brainstorming among key team members about the potential for fraud. Using audit interns and internal auditors, this study empirically examines two interventions hypothesized to improve the quality of ideas generated by audit interns and internal auditors. In the first intervention, auditors use a computer-based group support system to brainstorm either non-anonymously or anonymously. For the second intervention, auditors were either trained to use a paradigm-modifying creativity technique or not trained. Additionally, it is hypothesized that the creativity training will have the greatest impact on brainstorming effectiveness when auditors brainstorm anonymously. However, the results suggest that audit interns working non-anonymously generated the greatest number of fraud ideas and also the greatest number of original ideas. Audit interns who received training on a paradigm-modifying creativity training technique generated the greatest number of unique ideas and received, on average, the highest usefulness to the audit process score.

Atliekant įmonių ar fizinių asmenų finansinius patikrinimus, Valstybinės mokesčių inspekcijos darbuotojai duomenis analizuoja, atlieka atranką ir po to suplanuoja atlikti auditinius patikrinimus. Tam tikslui sudaromi patikrinimų planai. Šiame magistro darbe analizuojamas Šiaulių apskrities valstybinė mokesčių inspekcijos atrankos auditui skyriaus darbo specifika, aptariami sunkumai ir problemos nekompiuterizuotame auditinių planu sudaryme. Atlikus rinkoje esamų produktų palyginamąją analizę, buvo nuspręsta kurti naują sistemą. Sistema suprojektuota, realizuota, atliktas realizuotos sistemos testavimas bei jos kokybės vertinimas. Informacinė sistema palengvina patikrinimo planavimo procesą: duomenų suvedimą, ataskaitų formavimą bei duomenų paiešką. / Performing business or personal financial auditing, the State Tax Inspectorate's staff analyzes data, performs screening and afterwords plans auditing. Therefore, inspection plans are being made up. This paper analyzes the work particularity of the Auditing Screening Division of the Šiauliai County State Tax Inspectorate including challengers of the non-computerized formation of the auditing plans. Having done the comparative analysis of products existing on the market, it was decided to develop a new system. The system is designed, implemented, tested and the quality evaluation has been carried out. The information system facilitates the verification planning process: clearance of data, reporting and data searches.

During an audit, management frequently serves as an information source for auditors gathering evidence. Reliance on management's expertise requires auditors to exercise an adequate level of professional skepticism, because management is not an objective information source. In this respect, professional guidance urges auditors to maintain a skeptical mind-set since management's financial reporting incentives may lead to instances when it attempts to persuade the auditor into accepting a preferred accounting treatment. This study investigates how auditors' behavior when providing input on planning decisions common to an audit can influence an auditor's mind-set, and how this mind-set then influences the persuasiveness of subsequently encountered management information. My predictions are motivated by psychology theory on behavioral mind-sets, which indicates that in the course of completing a task, a mind-set can be activated that carries over and influences an individual's behavior in a subsequent, unrelated situation. In a 2x2 experiment, 83 experienced auditors participated in an update meeting with the engagement partner and then made preliminary internal control evaluations. I manipulated the activation of different mind-sets (bolstering or counter-arguing) during the audit update meeting; I also manipulated the severity of the control deficiency (high or low) during the subsequent internal control evaluation task. I hypothesized that the behavior of providing arguments either supporting or opposing common scheduling arrangements during a planning meeting with the engagement partner can activate a mind-set that then influences the persuasiveness of information subsequently received from the client. The increased severity of the deficiency was expected to mitigate the role of mind-sets in the audit environment. The results support my expectations. Auditors who developed a bolstering mind-set during a planning meeting rated the adequacy of management's internal control explanation higher and made internal control assessments indicative of lower risk than auditors who developed a counter-arguing mind-set. I also find that the impact of an auditor's mind-set is attenuated when auditors evaluate a control problem potentially indicative of a material weakness (i.e., higher severity). These results indicate that routine audit planning tasks altered an auditors' skeptical mind-set, which impacted the persuasiveness of management information, even though the update meeting was unrelated to the internal control assessment. However, as the severity of the identified deficiency increased, risk sensitivity mitigated the auditors' mind-set effects, as their professional skepticism was naturally heightened. These results have important audit implications given the importance of maintaining appropriate levels of professional skepticism throughout an audit, especially amid recent concerns that auditors, at times, fail to do so. The findings also inform the psychology and behavioral mind-set literatures by extending the generalizability of prior studies while also establishing the boundaries of this stream of research by examining different levels of severity. / Ph. D.

Bakgrund: Internet har sedan dess introduktion utnyttjats för dess massiva potential som marknadsföringsverktyg. Utvecklingen har gått mot sofistikerade interaktiva marknadsfö­ringssystem vars främsta mål är att styra trafik på internet. Trafikstyrningsbranschen på in­ternet omsatte ca 6,5 miljarder dollar år 2006 globalt och förväntas växa kraftigt. Denna studie ämnar undersöka problematik som har identifierats i aktuella rättsfall vid intäktsre­dovisning från trafikstyrningssystem. Risk kan föreligga främst genom manipulation av in­formation och transaktioner. Ur ett revisionsperspektiv vill denna studie undersöka om re­visor kan göra en korrekt riskbedömning angående intäkter från trafikstyrningssystem. Syfte: Syftet med studien är att studera och utvärdera revisorers riskbedömningar av in­täktsposter relaterade till trafikstyrningsintäkter på internet. Metod: För att uppnå studiens syfte används både en induktiv och deduktiv metod då stu­dien identifiera risker som kan förekomma inom intäktsredovisning av intäkter från trafik-styrningsnätverk främst grundad på egna antaganden baserade på sekundär data. Utifrån en deskriptiv teoretisk inramning sätts dessa i relation till revisorers riskbedömningar genom att analysera studiens empiriska resultat, insamlad genom öppna intervjuer. Referensram: Sekundär data, presenterade som referensram, används för att analysera riskaspekter. Referensramen bygger på sekundär data angående konceptet trafikstyrning samt ett aktuellt rättsfall som belyser problematiken på området. Teoretiskt ramverk: Det teoretiska ramverket bygger på redovisningsstandarder och prin­ciper på området intäktsredovisning. Vidare används även teoretisk bakgrund angående re­visorers riskbedömningar. Empirisk insamling: Den empiriska insamlingen är gjord genom fyra öppna ostrukture­rade intervjuer med revisorer som har erfarenhet av konceptet trafikstyrning. Analys: i analysen sammanförs den sekundära datan med det teoretiska ramverket i form av redovisningsstandarder och principer på området intäktsredovisning. 1 analysen förs ett resonemang hur dessa principer och standarder kan appliceras specifikt på området trafik-styrningsintäkter. Studien finner i sin analys att det kan föreligga viss problematik när det gäller intäktsredovisning från trafikstyrningsnätverk, risk föreligger främst i den lätthet med vilken information i trafikstyrningsnätverk i vissa fall kan manipuleras, och vilken påverkan detta har på applicerbarheten av gällande standarder och principer. Analysen finner också att revisorerna som deltagit i undersökning har en bra förståelse för dessa risker men att storheten och komplexiteten i dessa system samt kunskapsgap mellan revisorer med kun­skap på området och de som har mindre kunskap kan skapa problematik vid riskbedöm­ningar av dessa intäktsposter skall göras. Slutsats: Studien konstaterar att revisorer generellt besitter kunskap om vilka risker som kan föreligga intäktsredovisning från trafikstyrningsnätverk, om revisorerna har relevant kompe­tens och erfarenhetfrån liknande verksamhet. Detta kan skapa problematik eftersom risken före­ligger störst i mindre företag där de granskande revisorerna har mindre erfarenhet på om­rådet. / Background: Internet has since its introduction been exploited for its massive potential as a marketing tool. The development has been focused on creating sophisticated interactive marketing system with the main goal of redirecting Internet traffic, also called affiliate marketing. The affiliate marketing industry turns over about 6,5 million dollars in 2006 globally, and is expected to grow rapidly in the near future. The aim of this study is to investigate recently identified problems that may occur when accounting for income from affiliate marketing. These problems have been identified through a recent Swedish civil court case and this study is exclusively covering Sweden. Risk is mainly present due to easily manipulated affiliate marketing systems both in terms of transactions and information. From an auditors perspective this study will examine whether auditors are able to make a satisfying risk assessment of income from affiliate marketing. Purpose: The purpose of this study is to examine and evaluate auditor's risk assessment of income for affiliate marketing on the Internet. Method: To fulfil the purpose of this study an inductive and deductive approach was utilised since the study identifies risks that may be present in the accounting of income from affiliate marketing system. These risks are mainly identified by constructed assumptions based on empirical findings and secondary data. These risks will then be associated with the empirical findings, collected through semi-structured interviews. Frame of reference: Secondary data, presented as a frame of reference was utilised to analyse risk aspects in the process of income accounting from affiliate marketing networks. The frame of reference is based on secondary data concerning the concept of affiliate marketing and recent Swedish civil court case which highlights problems with the income accounting from affiliate marketing. Theoretical framework: The theoretical frame is base on standards and principles of accounting in the area of income accounting as well as selected framework surrounding auditor's risk assessment processes. Empirical findings: The empirical collection was made through four semi-structured interviews with auditors that have experience of affiliate marketing incomes. Analysis: The analysis connects the secondary data and empirical findings with the theoretical framework concerning standard and principles of income accounting. The analysis is reasoning how these principles and standard can be applied in the case of income accounting from affiliate marketing. The analysis of the study finds that there are indeed certain degrees of risk and problems when applying these standards on in this specific are of income accounting. Risks are mainly identified in the way in which information and transactions can be manipulated in some affiliate marketing networks. The analysis is also reasoning about the ability of auditors to assess risk in these systems. The auditors are generally good at identifying the risk involved with the complex nature and manipulability of these systems. Conciusions: This study concludes that auditors can identify and reason about the risks involved with income accounting from affiliate marketing, if they have relevant skills and experience from the industry. This can be problematic since the risks seem to mainly be present in smaller companies where the responsible auditors generally have less knowledge and skills from similar incomes.

<p><strong>Bakgrund: </strong>Internet har sedan dess introduktion utnyttjats för dess massiva potential som marknadsföringsverktyg. Utvecklingen har gått mot sofistikerade interaktiva marknadsfö­ringssystem vars främsta mål är att <em>styra trafik </em>på internet. Trafikstyrningsbranschen på in­ternet omsatte ca 6,5 miljarder dollar år 2006 globalt och förväntas växa kraftigt. Denna studie ämnar undersöka problematik som har identifierats i aktuella rättsfall vid intäktsre­dovisning från trafikstyrningssystem. Risk kan föreligga främst genom manipulation av in­formation och transaktioner. Ur ett revisionsperspektiv vill denna studie undersöka om re­visor kan göra en korrekt riskbedömning angående intäkter från trafikstyrningssystem.</p><p><strong>Syfte: </strong>Syftet med studien är att studera och utvärdera revisorers riskbedömningar av in­täktsposter relaterade till trafikstyrningsintäkter på internet.</p><p><strong>Metod: </strong>För att uppnå studiens syfte används både en induktiv och deduktiv metod då stu­dien identifiera risker som kan förekomma inom intäktsredovisning av intäkter från trafik-styrningsnätverk främst grundad på egna antaganden baserade på sekundär data. Utifrån en deskriptiv teoretisk inramning sätts dessa i relation till revisorers riskbedömningar genom att analysera studiens empiriska resultat, insamlad genom öppna intervjuer.</p><p><strong>Referensram: </strong>Sekundär data, presenterade som referensram, används för att analysera riskaspekter. Referensramen bygger på sekundär data angående konceptet trafikstyrning samt ett aktuellt rättsfall som belyser problematiken på området.</p><p><strong>Teoretiskt ramverk: </strong>Det teoretiska ramverket bygger på redovisningsstandarder och prin­ciper på området intäktsredovisning. Vidare används även teoretisk bakgrund angående re­visorers riskbedömningar.</p><p><strong>Empirisk insamling: </strong>Den empiriska insamlingen är gjord genom fyra öppna ostrukture­rade intervjuer med revisorer som har erfarenhet av konceptet trafikstyrning.</p><p><strong>Analys:</strong> i analysen sammanförs den sekundära datan med det teoretiska ramverket i form av redovisningsstandarder och principer på området intäktsredovisning. 1 analysen förs ett resonemang hur dessa principer och standarder kan appliceras specifikt på området trafik-styrningsintäkter. Studien finner i sin analys att det kan föreligga viss problematik när det gäller intäktsredovisning från trafikstyrningsnätverk, risk föreligger främst i den lätthet med vilken information i trafikstyrningsnätverk i vissa fall kan manipuleras, och vilken påverkan detta har på applicerbarheten av gällande standarder och principer. Analysen finner också att revisorerna som deltagit i undersökning har en bra förståelse för dessa risker men att</p><p>storheten och komplexiteten i dessa system samt kunskapsgap mellan revisorer med kun­skap på området och de som har mindre kunskap kan skapa problematik vid riskbedöm­ningar av dessa intäktsposter skall göras.</p><p><strong>Slutsats: </strong>Studien konstaterar att revisorer generellt besitter kunskap om vilka risker som kan föreligga intäktsredovisning från trafikstyrningsnätverk, <em>om revisorerna har relevant kompe­</em><em>tens och erfarenhetfrån liknande verksamhet. </em>Detta kan skapa problematik eftersom risken före­ligger störst i mindre företag där de granskande revisorerna har mindre erfarenhet på om­rådet.</p> / <p><strong>Background: </strong>Internet has since its introduction been exploited for its massive potential as a marketing tool. The development has been focused on creating sophisticated interactive marketing system with the main goal of redirecting Internet traffic, also called affiliate marketing. The affiliate marketing industry turns over about 6,5 million dollars in 2006 globally, and is expected to grow rapidly in the near future. The aim of this study is to investigate recently identified problems that may occur when accounting for income from affiliate marketing. These problems have been identified through a recent Swedish civil court case and this study is exclusively covering Sweden. Risk is mainly present due to easily manipulated affiliate marketing systems both in terms of transactions and information. From an auditors perspective this study will examine whether auditors are able to make a satisfying risk assessment of income from affiliate marketing.</p><p><strong>Purpose: </strong>The purpose of this study is to examine and evaluate auditor's risk assessment of income for affiliate marketing on the Internet.</p><p><strong>Method: </strong>To fulfil the purpose of this study an inductive and deductive approach was utilised since the study identifies risks that may be present in the accounting of income from affiliate marketing system. These risks are mainly identified by constructed assumptions based on empirical findings and secondary data. These risks will then be associated with the empirical findings, collected through semi-structured interviews.</p><p><strong>Frame of reference: </strong>Secondary data, presented as a frame of reference was utilised to analyse risk aspects in the process of income accounting from affiliate marketing networks. The frame of reference is based on secondary data concerning the concept of affiliate marketing and recent Swedish civil court case which highlights problems with the income accounting from affiliate marketing.</p><p><strong>Theoretical framework: </strong>The theoretical frame is base on standards and principles of accounting in the area of income accounting as well as selected framework surrounding auditor's risk assessment processes.</p><p><strong>Empirical findings: </strong>The empirical collection was made through four semi-structured interviews with auditors that have experience of affiliate marketing incomes.</p><p><strong>Analysis: </strong>The analysis connects the secondary data and empirical findings with the theoretical framework concerning standard and principles of income accounting. The</p><p>analysis is reasoning how these principles and standard can be applied in the case of income accounting from affiliate marketing. The analysis of the study finds that there are indeed certain degrees of risk and problems when applying these standards on in this specific are of income accounting. Risks are mainly identified in the way in which information and transactions can be manipulated in some affiliate marketing networks. The analysis is also reasoning about the ability of auditors to assess risk in these systems. The auditors are generally good at identifying the risk involved with the complex nature and manipulability of these systems.</p><p><strong>Conciusions: </strong>This study concludes that auditors can identify and reason about the risks involved with income accounting from affiliate marketing, if they have relevant skills and experience from the industry. This can be problematic since the risks seem to mainly be present in smaller companies where the responsible auditors generally have less knowledge and skills from similar incomes.</p>

The aim of this study was to determine to what degree the nature, extent and effectiveness of the practical training and experience trainee auditors obtain during the practical training period (articles of clerkship) in computer-assisted auditing techniques, is taken into account with the application of a competence-based approach, where particular competencies should be developed through a combination of formal teaching and practical training and experience. To start with, the prescribed requirements for the teaching and training of auditors were analysed and literature was studied to delimit the entry level competencies auditors should posses in computer-assisted auditing techniques. Thereafter research questionnaires were developed and sent to practitioners in auditing firms who are responsible for the practical training of trainee auditors, and to a selection of trainee auditors who qualified to write Part II of the Qualifying Examination (Auditing specialisation) of the Public Accountants' and Auditors' Board. The responses received from practitioners and trainee auditors were analysed and subsequent findings were made on the nature, extent and effectiveness of the practical training and experience trainee auditors obtain during the practical training period (articles of clerkship) in computer-assisted auditing planning techniques, computer-assisted auditing techniques to obtain audit evidence and computer-assisted auditing tools. The findings were related to the application of a competence-based approach and the conclusion was reached that the practical training and experience that trainee auditors obtain during the period of practical training (articles of clerkship) in computer-assisted auditing techniques is not sufficiently taken into account in the application of a competence-based approach. In conclusion recommendations were made for an improved application of a competence-based approach based on the findings of the practical training and experience trainee auditors obtain in computer-assisted auditing techniques during the practical training period. These recommendations have particular implications for practitioners responsible for the practical training of trainee auditors, academics responsible for formal teaching, and the Public Accountants' and Auditors' Board and South African Institute of Chartered Accountants jointly responsible for the Education Requirements and Practical Training Requirements of entry level auditors. / Auditing / D.Com

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)