ticular task, cause the auditor to better focus his
or her attention on relevant prior and new information,
and enable the auditor to develop an
improved problem representation for the task.
Extrapolating from the research findings of
Mayer (1980), Wittrock (1989) and Christ
(1993), it is predicted that the performance of a
documentation task will result in better (e.g.,
unbiased) task performance.
In the experiment employed in this research,
the documentation task is to "draft a memorandum
to the senior audit partner for ABC Corporation
providing as many reasons as you can
that would support your recommended audit
opinion." Consistent with Kennedy (1993), this
task is designed to prodtjce greater effort among
the subjects. Like the tnemo-writing task utilized
by Hanno and Kida (1995, 10), this task
involves summarizing and synthesizing important
facts available to the subject in the early
stages of the belief-updating process. Based on
the literature reviewed above, it is predicted that
recency bias will be mitigated among subjects
who complete the documentation task, due to
some combination of better information recall
and comprehension, greater levels of attention
to the task, and improved problem representation,
all contributing to a belief-adjustment process
that does not place undue weight on information
received most recently.
The experiment uses a control group in
which subjects are not asked to perform the
memo-writing task. Since this treatment, in effect,
replicates prior research in which recency
effects were found (e.g., Asare 1992), it is predicted
that recency effects will arise among this
group. This is consistent with an expectation
that, in the absence of a documentation stimulus,
subjects performing an SbS evaluation task
will exert less effort, experience lapses in
memory and attention, and develop an inferior
problem representation for the task. As a result,
when these subjects reach the later stages
of the belief-updating process, tbey are expected
to focus relatively more attention on the evidence
items examined most recently, in comparison
to less easily recalled evidence items
examined earlier in the process. In turn, this
will influence the relative weight placed on these
respective evidence items, leading to a reeency
effect.
Based on the preceding discussion, the hypotheses
to be tested are as follows:
Hj Among auditors in the control group, those
who evaluate mitigating factors followed
by contrary information will exhibit greater
downward belief revision (or less upward
belief revision) than those who evaluate the
same evidence in the reverse order.
Hj Among auditors in the documentation
group, those who evaluate mitigating factors
followed by contrary information will
exhibit the same amount of belief revision
as those who evaluate the same evidence iti
the reverse order.
In these hypotheses, the dependent variable is
audit judgment; specifically, revision of the assessed
likelihood that the client firm will continue
as a going concern.
THE EXPERIMENT
Experimental Task
The experiment is designed to test the hypotheses
in the context of a task (going-concern
evaluation and reporting) that has been employed
frequently in prior studies of recency effects in
audit judgment. The task involves making a series
of judgments about a firm's going-concern
status and a recommendation about the type of
audit report to issue. SAS No. 59 (AICPA, 1988)
requires auditors to evaluate whether there is
substantial doubt about the client entity's ability
to continue as a going concern, and if so, to
modify their audit report to include an explanatory
paragraph. This is perhaps one of the most
important decisions that auditors make.
The going-concern judgment may be characterized
as a sequential belief-revision process
in which the auditor identifies a "problem" company
and then collects and evaluates additional
evidence to decide whether to modify the audit
report. Each belief revision is a function of the
previous judgment and the current (new) evidence.
SAS No. 59 requires that the auditor consider
mixed evidence, including both evidence
that contradicts the going-concern assumption
(negative evidence) and evidence that mitigates
ticular task, cause the auditor to better focus hisor her attention on relevant prior and new information,and enable the auditor to develop animproved problem representation for the task.Extrapolating from the research findings ofMayer (1980), Wittrock (1989) and Christ(1993), it is predicted that the performance of adocumentation task will result in better (e.g.,unbiased) task performance.In the experiment employed in this research,the documentation task is to "draft a memorandumto the senior audit partner for ABC Corporationproviding as many reasons as you canthat would support your recommended auditopinion." Consistent with Kennedy (1993), thistask is designed to prodtjce greater effort amongthe subjects. Like the tnemo-writing task utilizedby Hanno and Kida (1995, 10), this taskinvolves summarizing and synthesizing importantfacts available to the subject in the earlystages of the belief-updating process. Based onthe literature reviewed above, it is predicted thatrecency bias will be mitigated among subjectswho complete the documentation task, due tosome combination of better information recalland comprehension, greater levels of attentionto the task, and improved problem representation,all contributing to a belief-adjustment processthat does not place undue weight on informationreceived most recently.The experiment uses a control group inwhich subjects are not asked to perform thememo-writing task. Since this treatment, in effect,replicates prior research in which recencyeffects were found (e.g., Asare 1992), it is predictedthat recency effects will arise among thisgroup. This is consistent with an expectationthat, in the absence of a documentation stimulus,subjects performing an SbS evaluation taskwill exert less effort, experience lapses inmemory and attention, and develop an inferiorproblem representation for the task. As a result,when these subjects reach the later stagesof the belief-updating process, tbey are expectedto focus relatively more attention on the evidenceitems examined most recently, in comparisonto less easily recalled evidence itemsexamined earlier in the process. In turn, thiswill influence the relative weight placed on theserespective evidence items, leading to a reeencyeffect.Based on the preceding discussion, the hypothesesto be tested are as follows:Hj Among auditors in the control group, thosewho evaluate mitigating factors followedby contrary information will exhibit greaterdownward belief revision (or less upwardbelief revision) than those who evaluate thesame evidence in the reverse order.Hj Among auditors in the documentationgroup, those who evaluate mitigating factorsfollowed by contrary information willexhibit the same amount of belief revisionas those who evaluate the same evidence itithe reverse order.In these hypotheses, the dependent variable isaudit judgment; specifically, revision of the assessedlikelihood that the client firm will continueas a going concern.THE EXPERIMENTExperimental TaskThe experiment is designed to test the hypothesesin the context of a task (going-concernevaluation and reporting) that has been employedfrequently in prior studies of recency effects inaudit judgment. The task involves making a seriesof judgments about a firm's going-concernstatus and a recommendation about the type ofaudit report to issue. SAS No. 59 (AICPA, 1988)requires auditors to evaluate whether there issubstantial doubt about the client entity's abilityto continue as a going concern, and if so, tomodify their audit report to include an explanatoryparagraph. This is perhaps one of the mostimportant decisions that auditors make.The going-concern judgment may be characterizedas a sequential belief-revision processin which the auditor identifies a "problem" companyand then collects and evaluates additionalevidence to decide whether to modify the auditreport. Each belief revision is a function of theprevious judgment and the current (new) evidence.SAS No. 59 requires that the auditor considermixed evidence, including both evidencethat contradicts the going-concern assumption(negative evidence) and evidence that mitigates
การแปล กรุณารอสักครู่..