Preparers’ control‐risk assessments under alternative audit‐review processes |
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Authors: | Gang Wu |
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Institution: | Department of Accounting and Business Information Systems, The University of Melbourne, VIC, 3010, Australia |
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Abstract: | This study investigates the impact of a decomposed audit‐review process on audit preparers’ control‐risk assessments, taking audit experience into consideration. Using an experiment, it manipulates the audit‐review type (decomposed review versus non‐decomposed review) and preparers’ audit experience level (more experienced versus less experienced). Analysis of data collected from two mid‐tier audit firms supported the author’s predictions. First, working‐paper preparers assessed control risk more accurately in a decomposed than in a non‐decomposed review. Second, less‐experienced auditors benefitted more from a decomposed review than more‐experienced auditors. |
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Keywords: | Control‐risk assessments Decomposed review Non‐decomposed review Audit experience M41 M42 |
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