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The effect of information presentation structures on audit planning and review judgments

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  • JEFIM EFRIM BORITZ

Abstract

. This study examines the effect of data structuring techniques on audit judgments by comparing responses based on information cues arranged according to a hierarchically structured template with the response to identical cues arranged in a simple list. Forty auditors, at five different levels of expertise, reviewed the audit strategy of a hypothetical senior and provided evaluations of the original plan, a revised set of plans, and reports of their difficulty in making the required judgments. The experimental task involved 16 cases, in which types of transaction processing systems (i.e., manual and computerized), and internal control cues, were manipulated in addition to the format of presenting information. Structure of information presentation appears to play a significant role in the evaluations and plans of the auditors, but is considered to contribute substantially to the difficulty of making judgments. In most cases, structure appears to contribute to uniformity of responses; but, in some instances it actually seems to exaggerate differences in auditors' judgments. Résumé. Cette étude examine l'effet des techniques de structure des données sur les jugements en vérification, en comparant les réponses basées sur une information organisée de façon hiérarchique avec les réponses basées sur la même information organisée selon la structure d'une liste simple. Quarante vérificateurs de cinq niveaux de compétence différents, ont révisé la stratégie de vérification d'une chef d'équipe hypothétique et ont présenté des évaluations du plan original, d'un ensemble de plans révisés et ont fait rapport de leur difficulté en rendant les jugements requis. L'expérience comportait 16 cas dans lesquels des types de systèmes de traitement (i.e. manuels et informatisés) et des éléments de contrôle devaient être pris en considération en plus du format de présentation de l'information. La structure de présentation de l'information semble jouer un rôle significatif dans les évaluations et les plans des vérificateurs et contribue de façon importante à la difficulté de rendre des jugements. Dans la plupart des cas, la structure de présentation de l'information semble contribuer à l'uniformité des réponses; dans certains cas cependant, elle semble exagérer les différences dans les jugements des vérificateurs.

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  • Jefim Efrim Boritz, 1985. "The effect of information presentation structures on audit planning and review judgments," Contemporary Accounting Research, John Wiley & Sons, vol. 1(2), pages 193-218, March.
    • Handle: RePEc:wly:coacre:v:1:y:1985:i:2:p:193-218
    DOI: 10.1111/j.1911-3846.1985.tb00376.x
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    References listed on IDEAS

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    1. Ricchiute, Dn, 1984. "An Empirical-Assessment Of The Impact Of Alternative Task Presentation Modes On Decision-Making Research In Auditing," Journal of Accounting Research, Wiley Blackwell, vol. 22(1), pages 341-350.
    2. Joyce, Ej, 1976. "Expert Judgment In Audit Program Planning," Journal of Accounting Research, Wiley Blackwell, vol. 14, pages 29-60.
    3. Hamilton, Re & Wright, Wf, 1982. "Internal Control Judgments And Effects Of Experience - Replications And Extensions," Journal of Accounting Research, Wiley Blackwell, vol. 20(2), pages 756-765.
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    2. Enis, Charles R., 1995. "Expert-novive judgments and new cue sets: Process versus outcome," Journal of Economic Psychology, Elsevier, vol. 16(4), pages 641-662, December.
    3. Rajni Mala & Parmod Chand, 2015. "Judgment and Decision‐Making Research in Auditing and Accounting: Future Research Implications of Person, Task, and Environment Perspective," Accounting Perspectives, John Wiley & Sons, vol. 14(1), pages 1-50, March.
    4. Dinuja Perera & Parmod Chand & Rajni Mala, 2020. "Confirmation bias in accounting judgments: the case for International Financial Reporting Standards for small and medium‐sized enterprises," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 4093-4119, December.
    5. Rich, J. S. & Solomon, I. & Trotman, K. T., 1997. "The audit review process: A characterization from the persuasion perspective," Accounting, Organizations and Society, Elsevier, vol. 22(5), pages 481-505, July.
    6. Mala, Rajni & Chand, Parmod, 2014. "Impacts of Additional Guidance Provided on International Financial Reporting Standards on the Judgments of Accountants," The International Journal of Accounting, Elsevier, vol. 49(2), pages 263-288.
    7. Trotman, Ken T. & Bauer, Tim D. & Humphreys, Kerry A., 2015. "Group judgment and decision making in auditing: Past and future research," Accounting, Organizations and Society, Elsevier, vol. 47(C), pages 56-72.
    8. E. Michael Bamber & Joseph H. Bylinski, 1987. "The effects of the planning memorandum, time pressure and individual auditor characteristics on audit managers' review time judgments," Contemporary Accounting Research, John Wiley & Sons, vol. 4(1), pages 127-143, September.
    9. Chuleeporn Changchit & Clyde W. Holsapple, 2004. "The development of an expert system for managerial evaluation of internal controls," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 12(2), pages 103-120, April.

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