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- Title
Joint Impact of Materiality Guidance and Justification Requirement on Auditors' Planning Materiality.
- Authors
Audsabumrungrat, Juthathip; Pornupatham, Sompong; Hun-Tong Tan
- Abstract
In this study, we examine a setting in which overreliance on structured materiality guidance leads to less appropriate materiality assessments by auditors, and investigate whether a justification requirement in the absence of accountability mitigates this effect. Results from our experiment show that audit managers make less conservative and less appropriate planning materiality assessments in the presence of structured materiality guidance, but that this detrimental effect is mitigated by the need to justify their judgments. Our study on the joint effect of these two features extends current literature on materiality judgments and has implications for audit practice.
- Subjects
AUDITORS; ACCOUNTING firms; JUSTIFICATION (Ethics); MANAGERIAL accounting; MATERIALITY (Accounting); AUDITING; MANAGEMENT
- Publication
Behavioral Research in Accounting, 2016, Vol 28, Issue 2, p17
- ISSN
1050-4753
- Publication type
Article
- DOI
10.2308/bria-51339