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    The Effect of Early Career Experience on Auditors'...
    research summary posted October 16, 2015 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.05 Diversity of Skill Sets e.g., Tenure and Experience, 09.0 Auditor Judgment 
    The Effect of Early Career Experience on Auditors' Assessments of Error Explanations in Analytical Review.
    Practical Implications:

    The results of this study have other implications for audit researchers. The results of this study suggest that staff-level auditors may be appropriate surrogates for senior-level auditors for certain tasks, under certain conditions. This has implications for researchers because staff-level auditors may be more accessible to researchers than senior-level auditors due to being less time constrained and being more connected to universities due to being recent graduates or being enrolled in a fifth-year Master’s program concurrent with their being staff-level auditors. Also, this study extends research on the role of individuals’ subjective experience while self-generating alternative explanations on their likelihood assessments.


    Yen, A. C. 2012. The Effect of Early Career Experience on Auditors' Assessments of Error Explanations in Analytical Review. Behavioral Research in Accounting 24 (2): 211-229.

    analytical review, audit experience, counterfactual reasoning
    Purpose of the Study:

    This paper examines the analytical review judgments of staff-level auditors. The performance of analytical review procedures has traditionally been associated with senior-level auditors. However, changes in the audit environment (e.g., increased team auditing, a shift away from compliance testing to increased analytical procedures, and more work pushed down to lower-level staff) over the last ten to fifteen years may have led to staff-level auditors being exposed to the analytical review process, and more specifically, financial statement error knowledge, earlier in their careers. Thus, an assessment of staff-level auditors’ performance on analytical review procedures is necessary, both to increase the understanding of the learning curve as it relates to analytical review procedures and to provide evidence on the readiness of staff-level auditors to perform these traditionally more senior-level procedures. To examine this research question, the author conducts an experiment based on Heiman (1988, 1990). 

    Design/Method/ Approach:

    Forty-six staff-level auditors and forty-one graduate accounting students with no full-time audit experience participated in the experiment and were paid a flat wage of ten dollars plus the chance of winning a drawing for a number of restaurant gift certificates. The graduate accounting students were recruited from two accounting classes at an urban university in the northeastern United States. The staff-level auditors were recruited from professional contacts of the author. The evidence was gathered prior to March 2012.


    The author finds that both staff-level and student participants overestimate (underestimate) the likelihood of specified (unspecified) causes, and that providing either group with alternative explanations reduces their likelihood assessments for an original specified cause. On the other hand, when participants are asked to self-generate alternative explanations, the likelihood assessments for staff-level auditors and students are different. Students’ likelihood assessments increase after being asked to self-generate alternative explanations. The pattern of results for the students in this study is consistent with the pattern observed for the students in Heiman (1988). For staff-level auditors, their assessments are reduced after being asked to self-generate alternative explanations, if they self-generate at least two alternatives. The pattern of results for staff-level auditors in this study is similar to the pattern observed for senior-level auditors in Heiman (1990). Overall, these results show that staff-level auditors perform more like Heiman’s (1990) senior-level auditors than like students on this analytical review task.

    Audit Team Composition, Auditor Judgment
    Diversity of Skill Sets (e.g. Tenure & Experience)