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Use of forward versus backward reasoning during audit analytical procedures: evidence from a computerised‐process‐tracing field study

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  • Ed O'Donnell

Abstract

Audit judgement research has widely assumed that auditors rely primarily on backward reasoning during analytical procedures but the relative use of forward reasoning has not been directly examined. The present study explains how auditors use backward and forward reasoning during analytical procedures, discusses evidence from other research suggesting that forward reasoning could be more prevalent, and examines the relative use of forward reasoning during analytical procedures with data from a computerised process‐tracing field study. Results suggest that auditors rely extensively on forward reasoning when using analytical procedures. Findings motivate future research that examines when forward and backward reasoning are most effective.

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  • Ed O'Donnell, 2004. "Use of forward versus backward reasoning during audit analytical procedures: evidence from a computerised‐process‐tracing field study," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 44(1), pages 75-95, March.
    • Handle: RePEc:bla:acctfi:v:44:y:2004:i:1:p:75-95
    DOI: 10.1111/j.1467-629x.2004.00097.x
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    1. Libby, R, 1985. "Availability And The Generation Of Hypotheses In Analytical Review," Journal of Accounting Research, Wiley Blackwell, vol. 23(2), pages 648-667.
    2. Libby, R & Frederick, Dm, 1990. "Experience And The Ability To Explain Audit Findings," Journal of Accounting Research, Wiley Blackwell, vol. 28(2), pages 348-367.
    3. Waller, William S. & Felix, William Jr, 1989. "Auditors' causal judgments: Effects of forward vs backward inference on information processing," Accounting, Organizations and Society, Elsevier, vol. 14(1-2), pages 179-200, January.
    4. Mcdaniel, Ls & Kinney, Wr, 1995. "Expectation-Formation Guidance In The Auditors Review Of Interim Financial Information," Journal of Accounting Research, Wiley Blackwell, vol. 33(1), pages 59-76.
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