Auditors' Use of Formal Advice from Internal Firm Subject Matter Experts: The Impact of Advice Quality and Advice Awareness on Auditors' Judgments
Wright, Nicole S
MetadataShow full item record
During an audit, if an audit team does not have sufficient knowledge when auditing a complex issue they often call upon subject matter experts to provide advice. While these experts are the knowledge experts in their area, the quality of the advice depends upon their ability to fully understand and incorporate client specific facts. PCAOB inspection reports suggest that audit teams are neglecting to perform the required work to assess the quality of experts' recommendations. Additionally, the decision to use subject matter experts can be made during planning or when a complex issue surfaces during the audit. As such, auditors may or may not be a priori aware that an expert's use is planned before auditing a complex issue. In this dissertation, I examine how receiving advice of different levels of quality in terms of whether it incorporated all relevant client facts (lower or higher), and a priori awareness of the use of a subject matter expert (aware or unaware), can impact auditors' use of the advice and the resulting effort and judgment accuracy. I conducted a computerized experiment where professional auditors read a case study and made an initial judgment around a complex issue, received advice, and then made a final judgment. Based on advice-taking literature, I predict and find support that auditors who are a priori unaware of the use of a subject matter expert will employ lower effort in understanding the client facts and thus be less discerning and more accepting of the advice received. Being a priori unaware and receiving low quality advice can lead to lower judgment accuracy than receiving high quality advice with a priori unawareness. Auditors who are a priori aware are expected to, and found to employ greater effort, thus reducing the accuracy differences between receiving high and low quality advice. These findings can help improve the professions' understanding of auditors' advice taking behavior and the conditions under which expert advice is accepted without performing the required quality assessment.
- Doctoral Dissertations 
Showing items related by title, author, creator and subject.
Sutphin, Michael D. (Virginia Tech. University Relations, 2009-10-19)Thanksgiving is a time to enjoy a good meal with family and friends. Virginia Cooperative Extension has tips for families and individuals who want to continue their traditions without sacrificing good nutrition or dipping ...
Sutphin, Michael D. (Virginia Tech. University Relations, 2008-10-13)Over the past few weeks, bankruptcies, government bailouts, and talk of a global credit crisis have rocked Wall Street, while a weakened housing market continues to trouble Main Street. Virginia Cooperative Extension ...
Exploring the Role of Federal Managers When Obtaining Legal Advice from Offices of the General Counsel Muetzel, James (Virginia Tech, 2014-03-11)Managers in federal executive branch agencies administer public programs and policies in a complex legal environment. To assist managers, each agency has an organization that is responsible for providing them legal advice, ...