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Auditors' Assessment of Evidence and Its Integration over Multiple Assertions
Hironori Fukukawa,
Hitotsubashi University
Theodore J. Mock, University of Southern California/ University Maastricht
ABSTRACT. The purpose of this study is to examine whether auditors' assessment of evidence and its integration are affected by the approach used to elicit the assessments (probability vs. belief functions) and the framing of an assertion to be verified (positive vs. negative). Recent audit research and professional standards (e.g., Bell, Peecher and Solomon 2005; SASs 106, 107 and 110) are placing more and more weight on auditors' risk assessments. However, the standards do not prescribe how such assessments should be made or aggregated over assertions or over different types of audit evidence. Based on an experiment in which 96 experienced auditors participated, we find statistically significant effects both on the assessments of evidence and its aggregation over sub assertions. These differences are important to audit practice and theory because such differences can affect both audit effectiveness and efficiency and they have potential implications for audit training and guidance.
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