An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

F. Ulfert Gronewold
University of Potsdam

Abstract: Auditors must assess whether financial statements present fairly the actual state of a firm’s affairs. However, this state usually does not persist when the audit is carried out and can no longer be observed. Rather, the auditor is dependent on audit evidence. In turn, audit quality directly depends on correctly evaluating the evidence’s probative value, which is indispensable for successfully reconstructing the unobservable affairs. No established theory on this vital auditing problem is available. Prior research is scattered and mostly not even noticed by today’s research. Scientific progress in this field requires a synthesis of the scattered findings as a preparatory step for any future research. Therefore, this paper offers (1) a framework of the determining factors of audit evidence’s probative value and (2) a systematic review of the relevant auditing literature. Conceptual frameworks are an important research instrument for theory development and for directing future research.

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