A SIGNAL DETECTION ANALYSIS OF AUDITORS' ANALYTICAL REVIEW JUDGMENTS.

Persistent Link:
http://hdl.handle.net/10150/143041
Title:
A SIGNAL DETECTION ANALYSIS OF AUDITORS' ANALYTICAL REVIEW JUDGMENTS.
Author:
ARIYO, ADEMOLA.
Issue Date:
1982
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
The auditors' preliminary analytical review procedures (PARPs) have recently received increased attention in the accounting literature, because of the growing realization that PARPs may significantly enhance audit effectiveness and efficiency. Although both judgmental and statistical PARPs (JARPs and SARPs respectively) are recognized in the professional literature, earlier research has concentrated exclusively on statistical ARPs (SARPs). This research bias is inappropriate, given that SARPs merely supplement, but do not replace, auditor-judgments in PARPs. Enhancement of audit effectiveness and efficiency requires, therefore, evidence bearing on several aspects of auditors' PARPs judgments. This dissertation uses a model based on Signal Detection Theory to provide evidence relating to the following aspects of auditors' PARPs judgments: (a) judgmental accuracy, (b) decision errors, (c) implicit loss functions, and (d) information required to facilitate PARPs judgments. The major findings of the study were: (1) auditors can make reasonably accurate AR judgments on the basis of limited information available at the onset of an audit; (2) their responses were affected by judgmental biases, with a propensity to flag for intensive audit account book values which are fairly presented; (3) the auditors' judgments were miscalibrated, being mostly overconfident; and (4) simple ARPs such as ratio analysis, scanning, and comparisons amongst data, are those preferred by auditors for their PARPs judgments. This study's findings suggest the need to identify the causes, and subsequently mitigate the effects, of judgment biases before the potential of auditors' AR judgments at enhancing audit effectiveness and efficiency can be fully realized.
Type:
text; Dissertation-Reproduction (electronic)
Keywords:
Auditing
Degree Name:
Ph.D.
Degree Level:
Doctoral
Degree Program:
Accounting; Graduate College
Degree Grantor:
University of Arizona
Committee Chair:
Soloman, Ira

Full metadata record

DC FieldValue Language
dc.language.isoen_USen_US
dc.titleA SIGNAL DETECTION ANALYSIS OF AUDITORS' ANALYTICAL REVIEW JUDGMENTS.en_US
dc.creatorARIYO, ADEMOLA.en_US
dc.contributor.authorARIYO, ADEMOLA.en_US
dc.date.issued1982en_US
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractThe auditors' preliminary analytical review procedures (PARPs) have recently received increased attention in the accounting literature, because of the growing realization that PARPs may significantly enhance audit effectiveness and efficiency. Although both judgmental and statistical PARPs (JARPs and SARPs respectively) are recognized in the professional literature, earlier research has concentrated exclusively on statistical ARPs (SARPs). This research bias is inappropriate, given that SARPs merely supplement, but do not replace, auditor-judgments in PARPs. Enhancement of audit effectiveness and efficiency requires, therefore, evidence bearing on several aspects of auditors' PARPs judgments. This dissertation uses a model based on Signal Detection Theory to provide evidence relating to the following aspects of auditors' PARPs judgments: (a) judgmental accuracy, (b) decision errors, (c) implicit loss functions, and (d) information required to facilitate PARPs judgments. The major findings of the study were: (1) auditors can make reasonably accurate AR judgments on the basis of limited information available at the onset of an audit; (2) their responses were affected by judgmental biases, with a propensity to flag for intensive audit account book values which are fairly presented; (3) the auditors' judgments were miscalibrated, being mostly overconfident; and (4) simple ARPs such as ratio analysis, scanning, and comparisons amongst data, are those preferred by auditors for their PARPs judgments. This study's findings suggest the need to identify the causes, and subsequently mitigate the effects, of judgment biases before the potential of auditors' AR judgments at enhancing audit effectiveness and efficiency can be fully realized.en_US
dc.typetexten_US
dc.typeDissertation-Reproduction (electronic)en_US
dc.subjectAuditingen_US
thesis.degree.namePh.D.en_US
thesis.degree.levelDoctoralen_US
thesis.degree.disciplineAccountingen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.chairSoloman, Iraen_US
dc.contributor.committeememberFerrell, William R.en_US
dc.contributor.committeememberSummers, George W.en_US
dc.contributor.committeememberVickrey, Donen_US
dc.contributor.committeememberWaller, Williamen_US
dc.identifier.proquest8305971en_US
dc.identifier.oclc683271998en_US
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