Does the expectation of finding deficiencies impact internal audit work?
Journal of Applied Accounting Research, 2009, vol. 10, issue 2, 122-131
Purpose - The main purpose of this paper is to examine whether the source of an expectation of finding deficiencies – the audit committee, the chief executive officer, or the internal auditor's own assessment – affects the time budgeted by internal auditors for that audit area. Design/methodology/approach - The approach used is a behavioral experiment where audit planning decisions are made by internal auditors for three hypothetical scenarios. Findings - The paper finds that the source of the expectation makes a difference in some cases. In particular, internal auditors allocate more time when the expectation of deficiencies results from a self-assessment than when it comes via communication from an audit committee member. The paper also finds that internal auditors do not generally increase audit time budgets if initial audit procedures find no reportable deficiencies when deficiencies are expected to be found. Research limitations/implications - Internal auditors typically obtain more information about an audit scenario than is provided in the research questionnaire. As well, economic incentives such as being fired for making poor planning decisions are absent in the paper. Practical implications - The results imply that the reliability of an expectation about deficiencies is more influential than the authority of the source. Originality/value - No prior research study has addressed the issue of whether the source of an expectation of finding deficiencies affects the time budgeted by internal auditors for that audit area.
Keywords: Internal auditing; Expectation; Audit committees; Chief executives (search for similar items in EconPapers)
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
http://www.emeraldinsight.com/10.1108/096754209109 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eme:jaarpp:v:10:y:2009:i:2:p:122-131
Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://emeraldgroupp ... journals.htm?id=jaar
Access Statistics for this article
Journal of Applied Accounting Research is currently edited by Julia Mundy
More articles in Journal of Applied Accounting Research from Emerald Group Publishing
Series data maintained by Virginia Chapman ().