The Analysis of Internal Control Systems

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An Investigation of Auditor
Decision Processes in the
Evaluation of Internal Controls and
Audit Scope Decisions

1. Introduction
Over the past decade numerous studies have focused on auditors' judgments. With few exceptions these studies have found that when auditors are given the same task, they frequently make different decisions.' This result has been obtained for relatively simple tasks (e.g., Joyce [1976]) and relatively complex tasks (e.g., Reckers and Taylor [1979] and Mock and Turner [1981]). While consensus of decisions is not * Visiting Assistant Professor and Professor, University of Southern California. We would like to thank William Waller and Paul Watkins for their comments on an early draft of this paper. The paper has also benefited from suggestions made by the referee. Financial support from Peat, Marwick, Mitchell and Co., the Center for Accounting Research, University of Southern California, and the Graduate School, University of Wisconsin- Madison is gratefully acknowledged. [Accepted for publication August 1982.] ' Studies indicating lack of agreement include: Joyce [1976], Reckers and Taylor [1979], Mock and Turner [1981], and Gaumnitz et al. [1982]. In addition, Ashton [1980] and Libby and Lewis [1981] cite other studies where a lack of agreement has been found. The primary exception to the lack of judgment consensus has been Ashton [1974], which has been replicated by Hamilton and Wright [1982], Ashton and Brown [1980], and Ashton and Kramer [1980].

Copyright (C, Institute of Professional Accounting 1983
the only criterion by which auditors' judgments should be evaluated, it has been of continuing concern to practicing accountants (e.g., Elliott [1980, p. 10]) and accounting researchers who continue to assess it in various settings. This concern is justified since consensus can be viewed as one of several necessary, although not sufficient, conditions of expert judgment (Einhorn [1974]) and...