A classroom example of the deleterious effects of auditor predictability

Eric E. Spires and Courtney Ward ()

Journal of Accounting Education, 2015, vol. 33, issue 1, 36-49

Abstract: If an auditor employs the same testing strategy (e.g., type of evidence, sample size, scope, selection method) year after year, or otherwise inadvertently discloses information about the audit plan, the auditee can predict auditor behavior on the current audit. The instructional exercise described in this note illustrates the deleterious effects on audit effectiveness of this predictability. Numerical examples and student decisions are used to show that the probability that the auditor will detect intentional misstatements (fraud) may be reduced dramatically if the auditor does not recognize the strategic aspects of auditing.

Keywords: Strategic auditing; Audit risk; Detection risk; Fraud auditing; Audit sampling; Audit skepticism (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joaced:v:33:y:2015:i:1:p:36-49

DOI: 10.1016/j.jaccedu.2014.10.002

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