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Design Considerations for Research on Analytical Procedures

Design Considerations for Research on Analytical Procedures This article discusses research design considerations for conducting behavioral research on auditors' performance of analytical procedures (APs). With the trend in practice towards increasing reliance on APs, it is essential that auditors are proficient in completing such tests. Therefore, research to understand and improve auditors' performance of APs is important. Once an unexpected fluctuation is identified, APs involve three phases: generation of plausible hypotheses (likely causes); gathering evidence to examine plausible hypotheses; and identification of the most likely cause followed by appropriate follow‐up actions. Although prior research has focused on these phases in isolation, they are, in fact, interrelated. Important research design issues and trade‐offs for each of the phases of APs are discussed. For instance, in examining hypothesis generation there are choices as to the amount and nature of case background information, number of ratios or accounts to explain; ex‐post evaluation of the quality of the hypothesis set; and instructions on number of causes that account for the fluctuation. Significant considerations are identified for making informed decisions among design choices. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Auditing Wiley

Design Considerations for Research on Analytical Procedures

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Publisher
Wiley
Copyright
Copyright © 2001 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1090-6738
eISSN
1099-1123
DOI
10.1111/1099-1123.00336
Publisher site
See Article on Publisher Site

Abstract

This article discusses research design considerations for conducting behavioral research on auditors' performance of analytical procedures (APs). With the trend in practice towards increasing reliance on APs, it is essential that auditors are proficient in completing such tests. Therefore, research to understand and improve auditors' performance of APs is important. Once an unexpected fluctuation is identified, APs involve three phases: generation of plausible hypotheses (likely causes); gathering evidence to examine plausible hypotheses; and identification of the most likely cause followed by appropriate follow‐up actions. Although prior research has focused on these phases in isolation, they are, in fact, interrelated. Important research design issues and trade‐offs for each of the phases of APs are discussed. For instance, in examining hypothesis generation there are choices as to the amount and nature of case background information, number of ratios or accounts to explain; ex‐post evaluation of the quality of the hypothesis set; and instructions on number of causes that account for the fluctuation. Significant considerations are identified for making informed decisions among design choices.

Journal

International Journal of AuditingWiley

Published: Nov 1, 2001

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