The effect of response mode on auditors' control risk assessments

Research has shown that the mode in which uncertainty is communicated can affect both the interpretation of that uncertainty and decisions based upon that information. This study investigates whether control risk assessments made using linguistic expressions of uncertainty, such as low, medium or hi...

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Bibliographic Details
Published in:Auditing : a journal of practice and theory 1993-10, Vol.12 (2), p.62
Main Authors: Reimers, Jane, Wheeler, Stephen, Dusenbury, Richard
Format: Article
Language:English
Subjects:
Accounting
Agreements
Audit risk
Auditing procedures
Auditing profession
Auditing standards
Auditors
Efficiency
Information processing
Internal controls
Judgment sampling
Linguistics
Materiality
Professional standards
Risk assessment
Studies
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Summary:Research has shown that the mode in which uncertainty is communicated can affect both the interpretation of that uncertainty and decisions based upon that information. This study investigates whether control risk assessments made using linguistic expressions of uncertainty, such as low, medium or high, differ from assessments made using numerical probabilities. Experienced auditors made control risk assessments, half using numerical probabilities and half using linguistic categories. The results showed that numerical risk assessments differed from linguistic assessments in 2 ways: 1. The assessments of those responding numerically were significantly lower than the assessments of those responding with linguistic categories. 2. There was a consistently higher level of agreement among those subjects who responded using linguistic categories, compared to those who responded numerically. Current auditing standards treat the 2 response modes as equivalent, but these results do not support the equivalency premise.
ISSN:0278-0380
1558-7991