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

Noel Harding
The University of New South Wales

Abstract: Motivated by the importance of being able to accurately assess another auditor’s competence, and the fact that any research aimed at improving these judgments is frustrated by a limited understanding of how these judgments are made, this study employs verbal protocol methodology to investigate the process by which auditors assess their colleagues’ competence. Two related analyses of verbal protocol data obtained from 20 seniors revealed that auditors rely heavily on an initial reference point or anchor when assessing the competence of their colleagues. There is very little processing of information following the establishment of the anchor. The results further revealed that the processes employed are relatively stable across different decision settings. Contrary to what might be inferred from the psychology literature, auditors do use different anchors when faced with different situations and analysis of the verbal protocols identifies consistencies in this regard.

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