Individual versus group-assisted audit evaluations : an empirical study of contingency evaluations within the choice-shift framework / BEBR No. 483

Reckers, Philip Merle; Schultz, Joseph J.

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https://hdl.handle.net/2142/27429 Copy

Description

Title

Individual versus group-assisted audit evaluations : an empirical study of contingency evaluations within the choice-shift framework / BEBR No. 483

Author(s)

• Reckers, Philip Merle
• Schultz, Joseph J.

Contributor(s)

University of Illinois at Urbana-Champaign. College of Commerce and Business Administration

Issue Date

1978-05-03

Keyword(s)

• Auditing.
• Uncertainty.
• Risk.

Abstract

The major purposes of this study were to relate the existing choice-shift research to the audit environment and to study empirically the effects of: (1) materiality; (2) authoritative status; (3) communication channel; (4) relative client size; and (5) individual-versus group-assisted contingency evaluations in an audit setting. The subjects of the experiment were 128 senior accountancy students who were in the last semester of their undergraduate curriculum and who were completing their second semester-long auditing course. The task was to determine the probability level at which a contingency loss must be disclosed in order to satisfy generally accepted accounting principles. Materiality and relative client size proved to be the most significant factors regarding the overall evaluations of the contingency cases, although all the variables were significant. The major focus of the study -- differences between individual and group-assisted risk evaluations -- resulted in the materiality, communication channel, and authoritative status factors playing an interactive and significant role. Based on the results of this study, it appears that the accounting firm wishing to suppress risk in its evaluations should insist that advisory consultation be done by telephone and that face-to-face consultation carry with it decisive authority. Also, it appears that the use of groups leads to more consistency in audit judgments and should be considered in view of the lack of other determinable criteria.

Publisher

[Urbana, Ill.] : College of Commerce and Business Administration, University of Illinois at Urbana-Champaign,

Series/Report Name or Number

Faculty working papers ; no. 483

Type of Resource

text

Language

eng

Permalink

http://hdl.handle.net/2142/27429

Has Version(s)

• http://hdl.handle.net/10111/UIUCOCA:individualversus483reck
• http://www.archive.org/details/individualversus483reck

Copyright and License Information

Copyright May 3 1978 Board of Trustees University of Illinois.

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