An investigation of experienced auditors' knowledge structures: A reaction time test
Hansa, John Joseph
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Permalink
https://hdl.handle.net/2142/23758
Description
Title
An investigation of experienced auditors' knowledge structures: A reaction time test
Author(s)
Hansa, John Joseph
Issue Date
1994
Doctoral Committee Chair(s)
Solomon, Ira
Department of Study
Business Administration, Accounting
Psychology, Experimental
Discipline
Business Administration, Accounting
Psychology, Experimental
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Business Administration, Accounting
Psychology, Experimental
Language
eng
Abstract
This dissertation extends prior research by investigating knowledge structures for financial statement errors, using a reaction time method, which previously has not been used to examine these issues. The two candidate knowledge structures, cycle and error type, have been identified in previous research. In the former, knowledge is structured around the transaction cycle from which the error originated (e.g., sales, purchase, payroll or inventory). In contrast, knowledge is structured around the type of error (e.g., cut-off, misclassification, mathematical accuracy, etc.) in an error-type organization. This dissertation also examines the links between knowledge structures and experience. Consistent with the psychology literature, theories have been forwarded hypothesizing an association between overall audit experience and knowledge structure. This link is examined. Recently, however, some counter-arguments emphasizing the differences between the auditing and psychology contexts, have called this hypothesis into question. Consistently, I employed a second experience measure, the amount of industry-relevant experience. A third measure, the amount of recent industry experience, is developed. Addressing a third goal, an exploratory investigation is performed of the relationship between knowledge structure and task performance.
An experiment was conducted in which professional auditors were asked to respond to individual stimuli that were presented in pairs. The first item of a pair served as a prime and it was either of the same error-type, of the same cycle-type or unrelated to the second (target) item. The subjects' task was to determine, as quickly as possible, whether or not the items were exemplars of financial statement errors. Evidence of a cycle-type (error-type) memory structure exists if the time to respond to targets with same cycle-type (error-type) is significantly shorted than the time to respond to targets with unrelated primes (i.e., the control condition).
As to the evidence for knowledge structures for financial-statement errors, results were mixed. Contrary to the hypotheses, the RT in the experimental conditions were not significantly shorter than that of the control condition. However, indirect evidence for knowledge structure exists because it was possible to correlate an individual difference variable (recent manufacturing experience) with both distributions of memory-structure facilitation. Such systematic correlations should not be possible if the facilitation distributions were pure noise. As to the relationship between knowledge structure and experience, recent industry experience was found to correlate positively with both cycle knowledge structure and error-type knowledge structure, while no evidence of a correlation was detected for overall industry or total auditing experience. As to the relation between knowledge structure and task performance, task performance was decomposed into two dimensions: task effectiveness and task efficiency. No evidence was uncovered to demonstrate a link between task effectiveness and knowledge structure. With respect to task efficiency, a significant relationship was found between knowledge structure and task performance. Subjects that utilized a cycle knowledge structure more than an error-type structure, completed the task significantly faster.
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