How Do Look-Back Analyses and Evidence Specificity Affect Auditors' Planning Judgments?

• 成果类型: Article
• 署名作者: Backof, Ann G.; Martin, Roger D.; Thayer, Jane
• 署名单位: University of Virginia; University System of Georgia; Georgia Institute of Technology
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/tar-2016-0660
• 发表日期: 2020
• 页码: 51-72
• 关键词: risk assessments; uncertainty; quantification; credibility; persuasion

摘要

During a look-back analysis, auditors review prior-period evidence to understand estimation inaccuracies and assess the reliability of management's estimation process. We find that evidence specificity moderates the relation between the consistency of an estimation inaccuracy with management's incentives and auditors' reliability assessments. The direction of an estimation inaccuracy has no effect on auditors' reliability assessments when the prior-period evidence is less specific. When prior-period evidence is more specific, auditors report the highest (lowest) reliability assessments of management's estimation process when an estimation inaccuracy is inconsistent (consistent) with management's incentives. Auditors' low reliability assessments in the more specific, consistent condition, however, do not translate to high risk assessments. Instead, specificity has a main effect on auditors' risk assessments. A follow-up experiment reveals, though, an inverse relation between auditors' reliability and risk assessments when auditors are provided procedures to address various levels of assessed misstatement risk.