An exploration of differences in auditors' and users' perceptions of key terms used to define auditors' responsibilities

Stephen A. Butler, Bart Ward and Mark F. Zimbelman

International Journal of Accounting, Auditing and Performance Evaluation, 2010, vol. 6, issue 1, pages 80-107

Abstract: Audit policy has used numerous terms to define auditors' responsibilities over the past several decades. This study explores the structural relationship among key terms used to define auditors' responsibilities including 'misstatement' and embedded terms such as error, irregularity and fraud. Several empirical modelling techniques are used to investigate auditors' and investors' perceptions of the intended meanings of these terms and to measure consensus among such perceptions. Several important differences are detected among auditors as well as between auditors and investors. We conclude that care should be taken by auditing standard setters in issuing standards and preparing guidance to support standards related to the intended meaning and usage of the term misstatement, and its embedded component terms.

Keywords: auditor perceptions; user perceptions; material misstatement; accounting performance; auditing performance; performance evaluation; auditor communication; audit reporting; fraud; cluster analysis; Pathfinder; multidimensional scaling; auditor responsibilities; auditing standards (search for similar items in EconPapers)
Date: 2010
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