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    The Effects of Experience on Complex Problem Representation...
    research summary posted May 9, 2012 by The Auditing Section, last edited May 25, 2012, tagged 09.0 Auditor Judgment, 09.04 Going Concern Decisions, 12.0 Accountants’ Reports and Reporting, 12.01 Going Concern Decisions 
    The Effects of Experience on Complex Problem Representation and Judgment in Auditing: An Experimental Investigation
    Practical Implications:

    The results of this study have implications for training future professionals.  In the classroom problem-solving techniques that more closely resemble the experienced group can be incorporated to advance professionals to the expert level faster.  Further, a stage approach may be more efficient.  This idea incorporates having two “expert systems”, one to move novices to the intermediate level of knowledge more quickly and another to move intermediates up to the level of experts faster. 


    Lehmann, C.M., and C.S. Norman. 2006. The effects of experience on complex problem representation and judgment in auditing: an experimental investigation. Behavioral Research in Accounting 18 (1): 65-83.

    expertise; problem representation; going concern; expert-novice paradigm
    Purpose of the Study:

    The purpose of this study is to evaluate how an accounting professional’s level of experience affects their ability to describe a problem (problem representation) and their judgment regarding a going-concern task.  The authors argue that as auditors become more experienced, they become more concise in their problem representations, capturing only the information most relevant to the judgment at hand.  Thus recent graduates and staff level auditors are the least concise and include more superficial analysis; senior associates are more concise and able to focus on relevant information better than novices, while partners/managers are able to provide the most condensed summaries.  

    This study also examines whether the different types of concepts noted in the problem representations are related to differences in judgment regarding a company’s ability to continue as a going-concern and which audit report is recommended. 

    Design/Method/ Approach:

    The experiment was performed with both graduate students and audit professionals.  Participants were split into three groups based on experience level: novice (graduate students and less than 1 year experience), intermediate (1-6 years’ experience), and experienced (more than 6 years’ experience).   

    Participants were provided industry background and financial information that included evidence of going-concern issues and were asked to summarize the financial condition, assess going-concern and recommend a type of audit report.  The authors based their conclusions on these responses. 

    • Experienced individuals are more concise in their problem representations (i.e. mentioned fewer concepts, relationships, and summaries) than intermediates or novices.
    • Intermediates noted fewer relationships than novices. 
    • The novices provided significantly more causation links than the experience group and the intermediate groups. The novice group provided significantly more summaries than the experienced group, but not the intermediate group.
    • The authors examined the effect of including certain concepts in an individual’s problem representation on their going-concern judgments and find that line of credit issues are related to lower assessment of survival and cash flow issues are associated with modifying the audit opinion.  However, the inclusion of regulatory issues or the industry in the summary is associated with higher assessment of survival.  These results did not differ by experience level, indicating judgments were not impacted by experience level. 
    Auditor Judgment, Accountants' Reporting
    Going Concern Decisions, Going Concern Decisions
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