The effect of format and experience on internal control evaluation

James Lloyd Bierstaker and Jay C. Thibodeau

Managerial Auditing Journal, 2006, vol. 21, issue 9, 877-891

Abstract: Purpose - The purpose of this paper is to investigate whether the use of a questionnaire or a narrative documentation format will impact an auditor's performance in identifying internal control design weaknesses. Design/methodology/approach - A field experiment approach with a sample of 73 auditors of varying experience. Findings - It is found that auditors who completed an internal control questionnaire (ICQ) correctly identified more internal control design weaknesses than auditors who prepared a narrative. Internal control evaluation experience moderated this effect. The results imply that the questionnaire documentation format stimulates an auditor's existing internal control knowledge, thereby enhancing performance when identifying internal control design weaknesses. Practical implications - These findings suggest that there are important benefits to auditors that may be lost if they choose not to use questionnaires for internal control evaluation. These findings have important implications for practitioners and standard setters, who appear to be gravitating away from the use of standardized ICQs. Originality/value - The results of this study may assist organizations that are considering what form their internal control documentation should take in response to the Sarbanes‐Oxley Act of 2002.

Keywords: Internal control; Auditors; Questionnaires (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:majpps:02686900610704984

DOI: 10.1108/02686900610704984

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