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An International Meeting of American Accounting
Association
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Direct Evidence of the Propensity of Auditors to Work Backwards: Familiar versus Unfamiliar Decision Aids |
Stephanie Farewell
University of Arkansas at Little Rock
Abstract: Kachelmeier and Messier (1990) and Messier, Kachelmeier, and Jensen (2001) examined the AICPA 1983 and 1999 nonstatistical sample size decision aids. They found that auditors “worked backwards” in the selection of decision aid inputs. This study makes two key contributions to the current research by KM and MKJ and Elder and Allen (2003). First, the research method directly observes rather than infers behavior. Further, this study investigates whether working backwards is an artifact of decision aid familiarity.
This study finds that approximately 25 percent of the auditors using the AICPA 1999 nonstatistical sample size decision aid observably worked backwards. Working backwards is not diminished by decision aid familiarity, 39 percent of the auditors who used a decision aid, with which they were familiar, observably worked backwards. Results support KM and MKJ and support an increased understanding of the process used by auditors in applying a nonstatistical sampling decision aid.