The role of audit evidence in a strategic audit

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1 Citation (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 languageEnglish
Pages (from-to)58-67
Number of pages10
JournalJournal of Accounting and Public Policy
Volume28
Issue number1
DOIs
Publication statusPublished - 2009 Jan 1

Keywords

  • Acceptance sampling
  • Audit evidence
  • Audit risk
  • Strategic audits

ASJC Scopus subject areas

  • Accounting
  • Sociology and Political Science

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