Abstract
This study examines how audit risk (the probability of false acceptance) and its components change when the auditor obtains audit evidence in an acceptance sampling model. Inherent risk and audit risk increase with audit evidence if the auditee has a sufficiently strong incentive for committing fraud. Detection risk always increases when audit evidence is introduced. If the auditor has a sufficiently strong incentive for avoiding false rejection, audit risk also increases with audit evidence. The analysis indicates that requiring auditors to obtain information is not effective in preventing material misstatements in at least some instances.
| Original language | English |
|---|---|
| Pages (from-to) | 58-67 |
| Number of pages | 10 |
| Journal | Journal of Accounting and Public Policy |
| Volume | 28 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2009 Jan |
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Keywords
- Acceptance sampling
- Audit evidence
- Audit risk
- Strategic audits
ASJC Scopus subject areas
- Accounting
- Sociology and Political Science
Cite this
The role of audit evidence in a strategic audit. / Ohta, Yasuhiro.
In: Journal of Accounting and Public Policy, Vol. 28, No. 1, 01.2009, p. 58-67.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The role of audit evidence in a strategic audit
AU - Ohta, Yasuhiro
PY - 2009/1
Y1 - 2009/1
N2 - This study examines how audit risk (the probability of false acceptance) and its components change when the auditor obtains audit evidence in an acceptance sampling model. Inherent risk and audit risk increase with audit evidence if the auditee has a sufficiently strong incentive for committing fraud. Detection risk always increases when audit evidence is introduced. If the auditor has a sufficiently strong incentive for avoiding false rejection, audit risk also increases with audit evidence. The analysis indicates that requiring auditors to obtain information is not effective in preventing material misstatements in at least some instances.
AB - This study examines how audit risk (the probability of false acceptance) and its components change when the auditor obtains audit evidence in an acceptance sampling model. Inherent risk and audit risk increase with audit evidence if the auditee has a sufficiently strong incentive for committing fraud. Detection risk always increases when audit evidence is introduced. If the auditor has a sufficiently strong incentive for avoiding false rejection, audit risk also increases with audit evidence. The analysis indicates that requiring auditors to obtain information is not effective in preventing material misstatements in at least some instances.
KW - Acceptance sampling
KW - Audit evidence
KW - Audit risk
KW - Strategic audits
UR - http://www.scopus.com/inward/record.url?scp=58049124679&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=58049124679&partnerID=8YFLogxK
U2 - 10.1016/j.jaccpubpol.2008.11.005
DO - 10.1016/j.jaccpubpol.2008.11.005
M3 - Article
AN - SCOPUS:58049124679
VL - 28
SP - 58
EP - 67
JO - Journal of Accounting and Public Policy
JF - Journal of Accounting and Public Policy
SN - 0278-4254
IS - 1
ER -