The impact of audit evidence documentation on jurors' negligence verdicts and damage awards Ann G. Backof

Por: Tipo de material: ArtículoArtículoDescripción: Páginas 2177 a la 2204Tema(s): En: The accounting review 2015 V.90 No. 6 (Nov)Incluye figuras, tablas, referencias bibliográficas y apéndicesResumen: Audit workpapers play a key role in auditor negligence trials, yet little is known about how workpaper documentation affects jurors' decision making. I investigate how auditors' documentation of their consideration of the alternative accounting treatments and their risk-based audit approach influence jurors' negligence verdicts and damage awards. I find that documentation of their consideration of the accounting alternatives increases the likelihood that auditors are found negligent because it increases jurors' perceptions of the foreseeability of the misstatement. However, when combined with documentation that explicitly links the audit risks to the work performed to address each risk, jurors award lower damage awards because they perceive auditors' actions prior to the negligent act as more compliant with the auditing standards. My results highlight the consequences of more complete documentation on jurors' evaluations of auditors and suggest the need for documentation policies that more effectively communicate the appropriateness of auditors' professional judgments.
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Revistas Central Bogotá Sala Hemeroteca Colección Hemeroteca 657 (Navegar estantería(Abre debajo)) 2015 V.90 No.6 (Nov) 1 Disponible 0000002031098

Audit workpapers play a key role in auditor negligence trials, yet little is known about how workpaper documentation affects jurors' decision making. I investigate how auditors' documentation of their consideration of the alternative accounting treatments and their risk-based audit approach influence jurors' negligence verdicts and damage awards. I find that documentation of their consideration of the accounting alternatives increases the likelihood that auditors are found negligent because it increases jurors' perceptions of the foreseeability of the misstatement. However, when combined with documentation that explicitly links the audit risks to the work performed to address each risk, jurors award lower damage awards because they perceive auditors' actions prior to the negligent act as more compliant with the auditing standards. My results highlight the consequences of more complete documentation on jurors' evaluations of auditors and suggest the need for documentation policies that more effectively communicate the appropriateness of auditors' professional judgments.

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