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

Robyn Moroney
Monash University

Roger Simnett
University of New South Wales

Abstract: The purpose of this study is to assess industry specialist behaviour at each stage of the decision-making process. The reason is to provide insights into how industry specialists achieve superior performance when working in specialization. A business risk identification and evaluation task is used. When key business risks are correctly identified and adequately tested for, audit risk is minimized and audit quality is maximized The results presented in this paper strongly support expectations that industry specialist auditors working in specialization are able to list significantly more key business risks and then information sources, processes, and accounts/assertions for an identified risk. Industry specialists clearly behave differently at each stage of the decision-making process when working in specialization. That superior behaviour supports the widely held view that industry specialization improves audit quality.

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