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4 An Investigation of a Measurement Based Approach to the Evaluation of Audit Evidence Theodore J. Mock* University of Southern California Arnold Wright* University of Nevada, Reno Several definitions of the auditing function have been proposed, e.g., Mautz and Sharaf (1961, p. 15); American Accounting Association (1972). At the root of these definitions is the notion that the accumulation of evidence is the cornerstone of the auditing, attestation process. There is also widespread recognition that the "quality'' of the many types of audit evidence varies considerably (AAA, 1971; Toba, 1975; Robertson, 1976; AICPA, 1973). In evaluating the propriety of a given assertion, an auditor must weigh the quality as well as the quantity of evidence gathered. Some forms of evidence are compelling such as observation of marketable securities while others are merely suggestive. Thus, evidence evaluation is a complex, vital decision. How should an auditor, then, consider the many factors involved and arrive at an appropriate judgment? What guidelines or tools are available to aid in this difficult task? Although there have been numerous attempts to provide theoretical frameworks which examine the nature of evidence,1 the concepts proposed are generally vague and not operational. Most importantly, an overall approach for evaluating evidence has not been presented. The purpose of this paper is to investigate the usefulness of a measurement based approach as an integrative, operational process to evaluate audit evidence. Towards this end the paper addresses four main topics. The first section considers the nature of audit evidence and its role in the audit process. This discussion is followed by a review of the literature. Several evidence evaluation frameworks are identified and analyzed. The third section introduces the measurement based approach and illustrates its use in audit evidence evaluation. The final section discusses the implications of this approach for practice and explores avenues for future research. The Nature of Audit Evidence and its Role in the Auditing Process Figure 1 presents a model of the role of evidence in the audit process. The model contains three major elements: * The authors wish to gratefully acknowledge the comments and ideas expressed by the participants at the University of Southern California Accounting Research Forum. 61
Investigation of a measurement based approach to the evaluation of audit evidence
Mock, Theodore J.
Nichols, Donald R., ed.
Stettler, Howard, ed.
Auditing -- Documentation
Auditing Symposium V: Proceedings of the 1980 Touche Ross/University of Kansas Symposium on Auditing Problems, pp. 061-076
|Source||Published by: University of Kansas, School of Business|
|Rights||Contents have not been copyrighted|
|Format||PDF page image with corrected OCR scanned at 400 dpi|
|Collection||Deloitte Digital Collection|
|Digital Publisher||University of Mississippi Library. Accounting Collection|