Abstract/Details

An examination of factors affecting auditors' hypothesis testing strategies


1989 1989

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Abstract (summary)

This study examines the prevalence of confirmatory hypothesis testing strategies among auditors and investigates factors that may affect the employment of such strategies. Two experiments were conducted. Experiment 1 examined the impact of source credibility of inherited hypotheses on auditors' hypothesis testing strategies. Source credibility was manipulated by varying the expertise and bias of the hypothesis source. Experiment 2 examined auditors' hypothesis testing activities when using information stored in memory. Practicing auditors were asked to review internal controls in the sales area of a hypothetical firm and to make an assessment of control risk. The results of both experiments were analyzed using ANOVA and MANOVA procedures.

The results suggest that auditors do not employ confirmatory hypothesis testing strategies. Rather, auditors had a strong tendency to consider negative information to be more relevant than positive information when assessing control risk resulting in the confirmation of negative hypotheses and disconfirmation of positive hypotheses. This tendency persisted regardless of the credibility of the hypothesis source, the direction of the hypothesis, and whether or not the hypothesis was tested from information stored in memory.

The overwhelming focus on negative information suggests that auditors employ a conservatism heuristic in evaluating internal control. This evidence may aid in the development of a model of auditor judgment in that the conservatism heuristic may be central to auditors' decision making processes and may affect the use of other heuristics.

Indexing (details)


Subject
Accounting
Classification
0272: Accounting
Identifier / keyword
Social sciences
Title
An examination of factors affecting auditors' hypothesis testing strategies
Author
Anderson, Brenda Hall
Number of pages
221
Publication year
1989
Degree date
1989
School code
0118
Source
DAI-A 50/05, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
Advisor
Kida, Thomas
University/institution
University of Massachusetts Amherst
University location
United States -- Massachusetts
Degree
Ph.D.
Source type
Dissertations & Theses
Language
English
Document type
Dissertation/Thesis
Dissertation/thesis number
8917326
ProQuest document ID
303773261
Copyright
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
http://search.proquest.com/docview/303773261
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