Auditing Section Research Summaries Space

A Database of Auditing Research - Building Bridges with Practice

This is a public Custom Hive  public

research summary

    An Examination of Auditor Planning Judgments in a Complex...
    research summary posted May 7, 2012 by The Auditing Section, last edited May 25, 2012, tagged 05.0 Audit Team Composition, 05.01 Use of Specialists e.g., financial instruments, actuaries, valuation, 07.0 Internal Control, 07.01 Scope of Testing 
    An Examination of Auditor Planning Judgments in a Complex Accounting Information System Environment
    Practical Implications:

    The results suggest that auditors’ AIS expertise can play a significant role in complex AIS settings and in their ability to compensate for CAS competence deficiencies.  The authors note that it may be prudent for firms to consider the combined capabilities of individuals when assigning auditors and CAS to engagements with complex AIS.


    Brazel, J. F. and C. P. Agoglia. 2007. An examination of auditor planning judgments in a complex accounting information system environment. Contemporary Accounting Research 24 (4): 1059-83.

    Auditor judgment, risk, risk management, fraud risk
    Purpose of the Study:

    This study examines auditor judgments in a complex accounting information system (AIS) environment. Auditing standards recommend that a computer assurance specialist (CAS) be assigned to assist in the audit of computer-intensive environments. 
    CAS (also known as information systems audit specialists and IT auditors) provide auditors with control-testing evidence relating to their client’s AIS.  Auditors use this information when making control risk assessments and planning substantive audit procedures.  This study examines how the auditors’ own level of AIS expertise and the competence of the CAS affect the assessed control risk and scope of substantive testing.

    Design/Method/ Approach:

    Participants included practicing auditors from four international and two national public accounting firms. Participants were audit seniors with an average of 3.7 years of experience.  The experiment was conducted before 2007.  

    Participants were provided a case that included background information for a hypothetical client, relevant authoritative audit guidance, and prior year workpapers.  After reviewing this information, participants assessed and documented inherent risk. Participants then received information about the CAS competence (high or low) and CAS control tests.  Participants were then asked to evaluate the strength of CAS testing, assess control risk, and plan the substantive audit procedures. 

    • Auditors with high AIS expertise and those assigned low competence CAS tended to assess control risk as higher than their counterparts.
    • Auditors assigned low competence CAS assessed control risk as higher regardless of their own AIS expertise.    
    •  When the competence of the CAS is deficient, auditors with higher AIS expertise compared to auditors with lower AIS expertise are more likely to identify and react to potential AIS-specific risks.
    Audit Team Composition, Internal Control
    Use of Specialists (e.g. financial instruments – actuaries - valuation), Scope of Testing
    home button