By: John T. Rigsby
Mississippi State University
I would appreciate hearing from
section members with suggestions for papers that you feel would be of interest
to others in the section. Please send any citations to me at
Anderson, B. H. and M. J. Maletta,
"Primary Effects and the Role of Risk in Auditor Belief - Revision
Processes," Auditing: A Journal of Practice and Theory (1999, Vol.
18, No. 1): pp. 75-89.
The authors investigated
whether primary effects in auditor belief revisions are a conditional function
of the level of inherent risk present in the audit risk environment (high/low),
and the nature of the information contained in the latter portion of the
information sequence (e.g., whether the information is positive or negative
with respect to the client's controls.) They found that primacy is essentially
the result of insufficient integration of late positive information in low
interest risk settings and likely leads to overauditing.
Bhattacharjee, S., T. Kida, and D.
M. Hanno, "The Impact of Hypothesis Set Size or the Time Efficiency and
Accuracy of Analytical Review Judgments," Journal of Accounting
Research (1999, Vol. 37, No. 1): pp. 83-100.
The authors examined the
effect of generating and testing hypothesis sets of different sizes on the
efficiency and accuracy of auditors' analytical review judgments. Three
different groups of auditors were asked to generate and test either one, three,
or six hypotheses, though they could evaluate as many total hypotheses as
desired. A fourth group had no such restrictions. The authors found that the
auditors who initially tested three hypotheses spent less time and were at
least as accurate as the auditors in the other groups, suggesting that for
similar tasks generating and testing a moderate number of hypotheses (e.g.,
three hypotheses) can improve auditors' time efficiency with no loss of
Bierstaker, J. , J. C. Bedard, and
S. F. Biggs, "The Role of Problem Representation Shifts on Auditor
Decision Processes in Analytical Procedures," Auditing: A Journal of
Practice and Theory (1999, Vol. 18, No. 1): pp. 18-36.
The authors investigated
how problem representation shifts can lead auditors to better insight into
possible explanations of discrepancies with the goal of improving auditor
decision processes in analytical procedures. Think-aloud verbal protocols were
collected from 12 senior auditors with three to five years' experience to
provide evidence of problem representation shifts and decision processes. Their
findings suggest that shifting to a productive problem representation was
critical in achieving effective decision processes and identifying the seeded
errors in the analytical procedures task.
Craswell, A. T. and J. R. Francis,
"Pricing Initial Audit Engagements: A Test of Competing Theories,"
The Accounting Review (1999, Vol. 74, No. 2): pp. 201-216.
Two competing theories of
initial engagement audit pricing are examined empirically. De Angelo's model
predicts initial engagement discounts in all settings. Dye's model specifically
predicts discounting will not occur in settings where audit fees are publicly
disclosed. The authors examined initial engagement pricing in Australia where
audit fees are publicly disclosed during a time period when comparable U.S.
studies report discounts of 25 percent. The results of the study were generally
consistent with Dye's conclusion that public disclosure of audit fees precludes
initial engagement discounting.
Cushing, B. E., "Economic
Analysis of Accountants' Ethical Standards: The Case of Audit Opinion
Shopping," Journal of Accounting and Public Policy (1999, Vol. 18,
No. 4-5): pp. 339-363.
The author argues that
the present strict system of ethical standards that relies upon explicit rules
plus monitoring and enforcement procedures for rule violations might usefully
be replaced by a laissez faire approach utilizing moral training and leadership
to motivate professional accountants to act in the public interest for the sake
of the profession as a whole. A framework is developed for examining the
relative economic merits of the strict and laissez faire approaches to ethical
standards within the accounting profession.
Drake, A. R., S. Haka, and S. P.
Ravenscroft, "Cost System and Incentive Structure Effects on Innovation,
Efficiency and Profitability in Teams," The Accounting Review(1999,
Vol. 74, No. 3): pp. 323-345.
The authors examine the
costs and benefits of activity-based costing (ABC) relative to more traditional
volume-based costing (VBC) systems. The authors found that profits are highest
when ABC is linked with group-based incentives, while the lowest level of
profits occurs when ABC is coupled with tournament-based incentives. ABC
moderates the incentive effect. Thus, the authors demonstrate that the
effectiveness of ABC relative to traditional VBC is influenced by its
interactive effect with incentive compensation.
Fisher, J. G., J. R. Frederickson,
and S. A. Peffer, "Budgeting: An Experimental Investigation of the Effects
of Negotiation," The Accounting Review (2000, Vol. 75, No. 1): pp.
This study examines how
budgets and the economic consequences of the budget-setting process differ when
budgets are set through a negotiation process vs. when set unilaterally. Also
examined are factors associated with negotiation agreement and the relation
between agreement and the economic consequences of negotiated budgets. The
authors found that both budgets and the economic consequences differ between
the two approaches, with budgets set through a negotiation process ending in
agreement containing significantly less slack and failed negotiations followed
by an imposed budget having detrimental effects on subordinate performance.
Fogarty, T. J. and L. P. Kalfers,
"An Empirical Evaluation of the Interpersonal and Organizational
Correlates of Professionalism in Internal Auditing," Accounting and
Business Research (2000, Vol. 30, No. 2): pp. 125-136.
The authors designed the
study to evaluate the extent of professional attitudes in internal auditors and
to identify their association with interpersonal and organizational conditions
of internal auditing. It was hypothesized that job characteristics would
generally be negatively associated with job stress and positively related to
professionalism. The results indicate that autonomy, feedback, and task
significance from the set of job characteristics and role conflict and role
ambiguity from role stress are related to some of the dimensions of
professionalism. The strongest support for the hypothesized relationship
between job characteristics and role stress was found for skill variety,
autonomy, and feedback. The results indicate that a complex set of work design
factors have selective importance for creating and maintaining professional
attitudes and behaviors of internal auditors.
Ghosh, D. and R. F. Lusch,
"Outcome Effect, Controllability and Performance Evaluation of Managers:
Some Field Evidence From Multi-Outlet Businesses," Accounting,
Organizations and Society, (2000, Vol. 25, No. 4-5): pp. 411-425.
The authors conducted a
field study examining the influence of outcome effect in performance
evaluations of managers in an organization. As expected, outcome determinants
over which the managers had control influenced their performance evaluations,
and environmental determinants of outcome over which they had no control did
not influence their evaluations. Unexpectedly, however, central management's
determinants of outcome over which the managers had no control also influenced
their evaluations. Subjective evaluations of store managers by their
supervisors were negatively impacted by failure of the store to meet its target
Houston, R. W., M.F. Peters, and
J.H. Pratt, "The Audit Risk Model, Business Risk and Audit-Planning
Decisions," The Accounting Review (1999, Vol. 74, No. 3): pp.
In this study, the
authors examine conditions under which the audit risk model does, and does not,
describe audit-planning (investment and pricing) decisions. In the presence of
errors, the audit risk model adequately described audit-planning decisions. In
the presence of irregularities, business risk dominated the audit risk model in
the explanation of the audit investment, and the fee contained a risk premium.
Jacob, J., T. Z. Lys, and M. A.
Neale, "Expertise in Forecasting Performance of Security Analysts,"
Journal of Accounting and Economics (1999, Vol. 28, No. 1): pp. 51-82.
In this study of
sell-side analysts' forecasts, the authors explore the effects of analyst
aptitude, learning-by-doing, and the internal environment of the brokerage
house on forecast accuracy. They found that analysts' aptitude and brokerage
house characteristics are associated with forecast accuracy, while
learning-by-doing is only associated with forecast accuracy when analysts'
company-specific aptitude in forecasting is not controlled for.
Lillis, A. M., "A Framework
for the Analysis of Interview Data From Multiple Field Research Sites,"
Accounting and Finance (1999, Vol. 39, No. 1): pp. 79-105.
The purpose of this paper
is to describe in some depth the method choices and analytical protocol used in
a field study project. The paper describes initially the link between research
question, research design, and analytical protocol. Its major focus is the
application of a systematic analytical protocol designed to encourage
completeness and impartiality in the collection and analysis of qualitative
information. Method issues are examined in the context of the author's
experiences, in the field and through the process of data analysis. The methods
used are also examined critically in retrospect.
MacIntosh, N. B., T. Shearer, D.
B. Thornton, and M. Welker, "Accounting As Simulacrum and Hypereality:
Perspectives on Income and Capital," Accounting, Organizations and
Society (2000, Vol. 25, No. 1): pp. 13-50.
The authors draw on
Baudrillard's concepts of simulacra, hyperreality and implosion to trace the
historical transformations of the accounting signs of income and capital from
Sumarian times to the present. The paper posits that accounting today no longer
refers to any objective reality but instead circulates in a
"hyperreality" of self-referential models. It then examines this
conclusion from the viewpoint of recent clean surplus model research and argues
that the distinction between income and capital is arbitrary and irrelevant
provided the measurement process satisfies the clean surplus relation. Although
accounting is arbitrary and hyperreal, it does impart a sense of exogeniety and
predictability, particularly through the income calculation. Therefore, it can
be relied on for decisions that do have real, material and social consequences.
Maletta, M. J., B. H. Anderson,
and J. P. Angelini, "Experience, Instruction, and Knowledge Acquisition: A
Study in Taxation," Journal of Accounting Education (1999, Vol. 17,
No. 4): pp. 351 - 366.
The authors investigate whether the
benefits of prior direct work experience on knowledge acquisition is a function
of the nature of the learning tasks (structured versus unstructured) used in
subsequent educational experiences. They found that inexperienced subjects were
assisted to a greater extent in the knowledge acquisition process by structured
rather that unstructured tasks, and that the opposite was true for experienced
subjects. They also found that the benefits of direct work experiences or
subsequent knowledge acquisition are generally greater for individuals with low
versus high learning aptitudes.
Mock, T. J. and A. M. Wright,
"Are Audit Program Plans Risk-Adjusted?," Auditing: A Journal of
Practice and Theory (1999, Vol. 18, No. 1): pp. 55-74.
The authors sought to
corroborate and extend archival research on the extent to which audit program
plans are responsive to client risks as prescribed by the Audit Risk Model.
Data were gathered on risk assessments and evidential plans in the accounts
receivable area from the working papers of 74 randomly selected manufacturing
clients. They found a statistical association between the level of and changes
in a limited number of assessed client risks and evidential plans, though
little change in audit programs were found with many tests done across a broad
array of engagements. As with prior research, the results indicate a lack of
strong relationship between client risks and audit programs.
Rau, S. E. and D. V. Moser,
"Does Performing Other Audit Tasks Affect Going-Concern Judgments?"
The Accounting Review (1999, Vol. 74, No. 4): pp. 493-508.
The study examines
whether personally performing other audit tasks can bias supervising seniors'
going-concern judgments. The authors did find a positive relationship with the
senior's subsequent going-concern judgment. The authors also examined subjects
attention to positive and negative information.
Saleb, N. M. and M. S. Hassan,
"Consensus of Audit Judgement in the Post-Modernist Era,"
International Journal of Management (1999, Vol. 16, No. 2): pp. 266-275.
The authors explore the
use of judgement consensus in auditor judgement experimentation, and present an
alternative route to understanding auditor's judgement in the hope of bridging
the gap between practitioners and researchers, integrating research with
practice, and providing a benchmark against which current research could be
evaluated in relation to practice.
Shields, M. D., F. J. Deng, and Y.
Kato, "The Design and Effects of Control Systems Tests of Direct -and
Indirect - Effects Models," Accounting Organization and Society
(2000, Vol. 25, No. 2): pp. 185-202.
The authors develop two
models on the effects of a control system that include participative standard
setting, standard-based incentives, and standard tightness. The direct model
proposes that the control system directly affects performance, whereas the
indirect model proposes that the effects of the control system on performance
are indirect through the mediating influence of job-related stress. Hypothesis
tests and a models-comparison test using structural equation modeling indicate
that the indirect model has a significantly better fit to the data than does
the direct model.
Skelton, S. W., "The Effect
of Experience on the Use of Irrelevant Evidence in Auditor Judgment,"
The Accounting Review (1999, Vol. 74, No. 2): pp. 217-224.
The author examined
whether experience moderates the diluting effect of irrelevant information on
auditors' judgments. The effects of irrelevant information on the going-concern
judgments of audit seniors is compared to the effect on the judgments of audit
managers and partners. An experience effect was found, with the irrelevant
information affecting the judgments of the less experienced auditors, but not
those of more experienced auditors.
Trotman, K. T., "Audit
Judgment Research - Issues Addressed, Research Methods and Future
Directions," Accounting and Finance (1998, Vol. 38, No. 2): pp.
The paper outlines the
purpose of judgment and decision making research in auditing. It examines the
following area of research: policy capturing, heuristics and biases,
information search, hypothesis generation and protocol analysis; knowledge and
memory; group decision making; decision aids; and environmental and
motivational issues. The author outlines for each of these areas the key
research issues that have been addressed, the research methods used, and a
summary of past research and potential future research.