Auditors' Efficiency Motivated Evaluation |
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Authors: | Anna M Cianci James Bierstaker |
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Institution: | a Department of Accounting, LeBow College of Business, Drexel University, Matheson Hall 400D, 3220 Market Street, Philadelphia, PA 19104, United States b Department of Accounting, Villanova School of Business, Villanova University, 800 Lancaster Ave., Villanova, PA 19085, United States |
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Abstract: | This paper proposes an evaluation approach - “Efficiency Motivated Evaluation” (EME hereafter) - that auditors use in response to increased efficiency demands. EME is defined as discounting (emphasizing) negative (positive) audit evidence and making favorable assessments as the demands for efficiency increase. We propose that increased time pressure will exacerbate auditors' use of EME but that experience will mitigate this tendency. We conduct an experiment in which 83 auditors differing in experience evaluated internal control effectiveness under high or low time budget pressure. Consistent with expectations based on EME, auditors assess overall internal control effectiveness higher, and positive information about controls as more relevant, under high (compared to) low time budget pressure. Moreover, we find that less (compared to more) experienced auditors under high time budget pressure rate negative information about controls as less relevant. The results suggest the importance of assigning experienced staff to high time budget pressure engagements. |
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Keywords: | Internal control evaluation Time budget pressure Experience Efficiency motivated evaluation |
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