Dissertation
DOES PRESENTATION FORMAT AFFECT AUDITORS' CONSIDERATION OF FINANCIAL AND NON-FINANCIAL INFORMATION IN ASSESSING MISSTATEMENT RISKS?
Doctor of Philosophy (PhD), Washington State University
01/2011
Handle:
https://hdl.handle.net/2376/111881
Abstract
The assessment of the Risk of material misstatement (RMM) has an important impact on the nature, timing and extent of further audit planning. Recent professional standards suggest that RMM assessment is improved if auditors can successfully integrate both financial and nonfinancial information. Unlike financial information, nonfinancial information is less susceptible to manipulation by management. Thus, auditors can use nonfinancial information to verify the client's financial information. Although inconsistencies between the financial and nonfinancial information may serve as a red flag for discovery of a potential misstatement, previous research (Bell et al., 1997; Cohen et al., 2000; Kinney and McDaniel, 1993) indicated that auditors often fail to consider nonfinancial information. The purpose of this dissertation is to investigate how the presentation format (simultaneous versus sequential) of information (financial versus nonfinancial) influences the auditors' RMM assessments. The presentation format of information is examined as a feature of a decision support system (DSS). Consistent with cognitive fit theory, simultaneous presentation is appropriate for displaying correlated financial information for improved RMM assessments based on the financial information. In addition, this dissertation postulates that consistent rather than inconsistent presentation formats of financial and nonfinancial information better support auditors' in subsequent RMM assessments based on both types of information. The results demonstrated that simultaneous presentation of financial information led to more accurate initial RMM assessments based on the financial information. The findings also revealed that the auditors' subsequent RMM assessments based on the financial and nonfinancial information were more accurate when the presentation formats of such information were consistent rather than inconsistent. Further, the auditors' subsequent RMM assessments based on the financial and nonfinancial information were most accurate when both types of information were displayed simultaneously.
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Details
- Title
- DOES PRESENTATION FORMAT AFFECT AUDITORS' CONSIDERATION OF FINANCIAL AND NON-FINANCIAL INFORMATION IN ASSESSING MISSTATEMENT RISKS?
- Creators
- Qian Song
- Contributors
- Siew H Chan (Advisor)Arnold M Wright (Committee Member)John T Sweeney (Committee Member)Craig D Parks (Committee Member)
- Awarding Institution
- Washington State University
- Academic Unit
- Carson College of Business
- Theses and Dissertations
- Doctor of Philosophy (PhD), Washington State University
- Number of pages
- 145
- Identifiers
- 99900581459201842
- Language
- English
- Resource Type
- Dissertation