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

Michael Favere - Marchesi
Simon Fraser University

Abstract: This study examined whether auditors, when they are processing mixed evidence, take into consideration the chronological order of evidence (giving rise to what this study refers to as a trend effect), or if their evaluation are influenced primarily by the order of presentation (giving rise to what the audit literature refers to as a recency effect). The study’s primary objective was to determine whether awareness of the temporal order of evidence would prevent auditors from placing more subjective weight on evidence that they most recently processed (i.e., whether the trend effect replaces the recency effect).

Auditors were given an experimental task of going-concern assessment. Four additional pieces of evidence were presented and after receiving each new piece of information, subjects were asked to revise their initial judgments. Auditors evaluating undated mixed evidence exhibited recency effects similar in magnitude to those shown by auditors who were asked to evaluate dated

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