We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
An Examination of the Effect of Hypothesis Framing on Auditors' Information Choices in an Analytical Procedure Task.
- Authors
Ayers, Susan; Kaplan, Steven E.
- Abstract
Libby (1985) contends that auditors' search for and evaluation of audit evidence, particularly during analytical procedures, is influenced by an explicitly or implicitly formulated hypothesis. Often a hypothesis may be 'framed' in alternative ways. For example, an auditor may frame analytical procedure results in terms of a 'misstatement' or a 'non-misstatement' frame. The concern arises that alternatively framed, but otherwise identical, audit issues may be treated differently. This concern has led Kinney and Haynes (1990) to propose modifying auditing standards to direct auditors to adopt a 'misstatement' frame. The purpose of the present study was to examine whether alternative analytical procedure frames affect auditors' information choices in an analytical procedure task. An experiment was conducted in which auditors listed which information cues were relevant to explain an unusual financial statement fluctuation. Half of the information cues made a misstatement explanation more plausible whereas half of the information cues made a non-misstatement explanation more plausible. The results indicate that hypothesis frame significantly affected auditors' information choices. Specifically, auditors in the misstatement (non-misstatement) frame select more misstatement (non-misstatement) cues as relevant. The hypothesis frame, however, did not significantly affect probability assessments.
- Subjects
AUDITING; AUDITORS; ACCOUNTING standards; STANDARDS; FINANCIAL statements
- Publication
Abacus, 1993, Vol 29, Issue 2, p113
- ISSN
0001-3072
- Publication type
Article
- DOI
10.1111/j.1467-6281.1993.tb00426.x