Guoping Liu

Abstract

Enhancing the quality of the audit enquiry process

Although there is an increasing need for auditors to rely on enquiry-based evidence, a CICA field study suggests considerable room for improvement exists in the use of audit enquiry to acquire reliable audit evidence. I investigate whether implementing various task interventions improves the process auditors use to collect enquiry-based evidence but my study is among the first to examine the information-acquisition phase of the enquiry process. Two theory-based interventions are examined: instructions intended to trigger cognitive planning; and the assignment of a task-specific goal. I also examine the effectiveness of a practice-based list of matters to consider in preparing for client enquiry. A 2x2 plus one between-subjects experiment is conducted using 115 participants with at least six months of auditing experience. I develop a five-category measurement tool for assessing the quality of the audit enquiry process, and provide evidence on its validity in capturing the major characteristics of a rigorous enquiry process. My results show that participants receiving instructions designed to trigger cognitive planning develop a better enquiry process, suggesting that the simple task instructions is an effective intervention for improving the process of audit enquiry. Assigning a task-specific goal has no effect on the audit enquiry process either independently or in combination with the instructions used to trigger cognitive planning. The practice-based intervention results in similar overall effects as the instructions used to trigger cognitive planning.