Auditing: A Journal of Practice & Theory articles from March 2000

Auditing: A Journal of Practice & Theory archives from March 2000

Client-Acceptance Decisions: Simultaneous Effects of Client Business Risk, Audit Risk, Auditor Business Risk, and Risk Adaptation.
March 22, 2000... SUMMARY Little is known about how audit partners make the client-acceptance decision. In this paper, a model is developed and tested that characterizes the client-acceptance decision as a process of risk evaluation and risk adaptation....

Evidence on the Effect of Financial and Nonfinancial Trends on Analytical Review.
March 22, 2000... SUMMARY In conducting analytical procedures, auditors may use both financial information and nonfinancial information such as general economic conditions, technological changes in the client's industry, and new products from...

Auditor Industry Specialization and Market Segmentation: Evidence from Hong Kong.
March 22, 2000... SUMMARY Audit fees of Big 6 and non-Big 6 accounting firms are examined for 348 publicly listed Hong Kong companies. Using more recent data than prior studies, we find evidence of Big 6 premiums for both general brand name and for...

Going-Concern Opinions: The Effects of Partner Compensation Plans and Client Size.
March 22, 2000... SUMMARY Partner compensation plans in large accounting firms tend to emphasize either local office profits or worldwide firm profits ("small-poor' or "large-pool" firms, respectively) (Trompeter 1994). Some have expressed concern over...

Error Projection and Uncertainty in the Evaluation of Aggregate Error.
March 22, 2000... SUMMARY At the end of the audit process, auditors evaluate the risk that aggregate financial statement error exceeds materiality. This evaluation is complex in that it requires a consideration of known error, projected error, and...

The Relation between Consensus and Accuracy in Low-to-Moderate Accuracy Tasks: An Auditing Example.
March 22, 2000... SUMMARY This study examines the relation between consensus and accuracy using an error frequency estimation task for which auditors' overall accuracy is known to be low to moderate. We also investigate whether experience moderates the...

Decision Processes in Audit Evidential Planning: A Multistage Investigation.
March 22, 2000... SUMMARY This paper reports the results of a verbal protocol study designed to assess how variation in inherent-risk factors affects auditors' decision processes throughout audit planning, including the tasks of risk assessment,...

Attribute Sampling: A Belief-Function Approach to Statistical Audit Evidence.
March 22, 2000... SUMMARY The Dempster-Shafer belief function framework has been used to model the aggregation of audit evidence based on subjectively assessed beliefs. This paper shows how statistical evidence obtained by means of attribute sampling...

The Role of Auditee Profitability in Pricing New Audit Engagements.
March 22, 2000... SUMMARY This paper examines the role of auditee profitability in pricing new audit engagements. Changes in the auditing environment are noted that suggest that auditors are managing their practices differently than they did in prior...

A Decision Aid for Assessing the Likelihood of Fraudulent Financial Reporting.
March 22, 2000... SUMMARY The auditor's responsibility for detecting fraudulent financial reporting is of continuing importance to both the profession and society. The Auditing Standards Board has recently issued SAS No. 82, Consideration of Fraud in a...