Reliance on accounting information, budgetary participation, and task uncertainty: tests of a three-way interaction

Article Abstract:

Three variables (management style related to budget emphasis, participation in budget-setting, and task uncertainty), are related to job-related tension (JRT). Earlier studies by A.G. Hopwood (1972), D.T. Otley (1978), and the authors (1982 and 1983) showed conflicting results on this subject. A survey of 96 managers in a Sydney, Australia manufacturing firm (yielding 76 usable questionnaires) indicates that: (1) management styles emphasizing the budget do not result in high JRT, as long as employees have high budgetary participation; and (2) management styles with low budgetary emphasis result in less JRT for employees who have limited budget responsibilities. These results do not hold if task uncertainty is introduced into the equation. JRT related to task uncertainty can, however, be ameliorated by emphasizing budget concerns in proportion to employees' budgetary responsibilities.

Social aspects, Research, Management science, Usage, Job stress, Stress (Psychology), Participatory management, Business budgets, Executive ability, Uncertainty, Managerial accounting

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Trials of legal disputes involving independent auditors: some empirical evidence

Article Abstract:

The functionality of trials as means for resolving audit-related legal disputes is documented for the period 1960 to 1990. A trial rate of approximately 10% was noted to hold for audit litigations throughout the prescribed period, representing a rate that is two times those in securities litigations for the same period. A high trial rate was observed for cases that dealt with changes in corporate ownership. These trials exhibited exhibited decreasing trial rates and increasing auditor success rates over time. Cases involving public and nonpublic clients both showed a 50% auditor success rate over time, although the trial rate for nonpublic client cases was triple those for public client cases. Judge trials also displayed a higher rate auditor rate when compared to jury trials.

Evaluation, Cases, Trials

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Further evidence on external auditors' reliance on internal auditors

Article Abstract:

The way in which external auditors adjust their audit procedures according to the reliability, competence, and objectivity of internal auditors is examined. Five cases which displayed different degrees of competence and objectivity by the internal auditors of a hypothetical company were studied. The results demonstrate that competence-work performance by the internal auditor had a major effect on the external auditor's judgments, but that the objectivity or interaction by the internal auditor had no effect on the external auditor's judgment. Limitations of the study are discussed.

Analysis, Case studies, Beliefs, opinions and attitudes, Auditors, Internal auditing

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