The role of audit evidence in a strategic audit

Yasuhiro Ohta

doi:10.1016/j.jaccpubpol.2008.11.005

The role of audit evidence in a strategic audit

Yasuhiro Ohta

Graduate School of Business Administration

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

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	https://doi.org/10.1016/j.jaccpubpol.2008.11.005
Publication status	Published - 2009 Jan

Keywords

Acceptance sampling
Audit evidence
Audit risk
Strategic audits

ASJC Scopus subject areas

Accounting
Sociology and Political Science

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title = "The role of audit evidence in a strategic audit",

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.",

keywords = "Acceptance sampling, Audit evidence, Audit risk, Strategic audits",

author = "Yasuhiro Ohta",

note = "Funding Information: I thank Lawrence Gordon and Martin Loeb (the editors), and two anonymous referees for many helpful suggestions. I also thank Atsushi Shiiba and the seminar participants of the 2005 CCRG Conference at Irvine, the 2006 JAA Annual Meeting at Tokyo, the 2007 Asian Pacific Conference on International Accounting Issues at Kuala Lumpur, and the 2008 AAAA Conference at Dubai for helpful comments and discussions. I gratefully acknowledge financial support from the Takahashi Industrial and Economic Research Foundation. All errors are my own. ",

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The role of audit evidence in a strategic audit

Abstract

Keywords

ASJC Scopus subject areas

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