Auditors' representation and retrieval of internal control knowledge

Article Abstract:

The effect of experience on auditors' retrieval of internal controls from memory was researched. The retrieval of knowledge most likely is a function of the way in which information is stored in the memory. Two types of organization of knowledge, taxonomic representation, which manifests itself as categoric checklists, and schematic representation, which manifests itself as information flowcharts, were examined. The retrieval characteristics of both taxonomic and schematic representation were tested by analyzing 113 auditors and 97 auditing students. Research results revealed that auditors exhibited a better recall for internal controls organized schematically, while the method of organizing knowledge did not affect the retrieval of information from memory of auditing students.

Auditors

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Auditors' confidence in recognition of audit evidence

Article Abstract:

Generally, auditors examine a large amount of data when conducting audits, and they must make recommendations on current auditing evidence based on material which may not be available for review before making recommendations. To test how accurate these audit recommendations are which are based on audit recognitions, eighty-five practicing auditors were asked to review hypothetical working papers and then, after a 24-hour delay, they were asked to respond to a recognition test in order to test how confident they were in their recognitions of audit evidence. Research results indicate that auditors are often as confident in their inaccurate and incomplete recognition of auditing evidence as they are in their accurate recognition of evidence.

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The taxpayer's labor and reporting decision: the effect of audit schemes

Article Abstract:

Income reporting for tax purposes may have a high level of inaccurate self-reporting, resulting in negative economic impact, but this can be countered by audit schemes. Three audit schemes which differ due to the amount of information used to determine which self-reports of income will be audited by the taxing authority are tested, as are the influence of alternative tax rates and penalty levels. The effects of the tax environment on income earnings and reporting are laboratory tested and show that audit schemes that have preliminary information sent by the taxpayer are better than random audit models at curbing underreporting, and that underreporting increases along with high tax rates and low penalties.

Tax evasion, Disclosure statements (Accounting), Tax auditing, Tax audits, Financial disclosure, Income accounting, Financial misrepresentations, Financial misrepresentation

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