Auditors' Use of Inconsistent Evidence

18 Pages Posted: 19 Dec 2010

See all articles by James J. Maroney

James J. Maroney

Northeastern University - D’Amore-McKim School of Business

Jean C. Bedard

Bentley University - Department of Accountancy

Date Written: September 1, 2003


Analytical procedures are an important audit tool worldwide (ISA 520, SAS 56). Auditors use analytical procedures to develop explanations for unexpected changes in accounts, and evaluate those explanations on the basis of further audit evidence. Research has found that people have difficulty using evidence inconsistent with proposed explanations, and thus may accept explanations that are false. The purpose of this paper is to study how auditors treat evidence inconsistent with analytical procedures explanations. Practising auditors at three levels of experience completed a two?stage task, generating explanations for an initial set of financial information and then revising their explanation list after receiving an expanded information set. Decision processes were captured through verbal protocols. Process analysis showed that the ability to evaluate evidence varied by experience level. Managers and seniors were better than assistants at recognizing inconsistent evidence, while managers outperformed other experience levels in integrating inconsistent evidence. Further, managers generated more and better explanations than other ranks after encountering new information. The implications for auditing research and practice are discussed.

Keywords: analytical procedures, explanation testing, auditor performance, verbal protocols

Suggested Citation

Maroney, James J. and Bedard, Jean C., Auditors' Use of Inconsistent Evidence (September 1, 2003). International Journal of Auditing, Vol. 1, Issue 3, pp. 187-204, 2003. Available at SSRN: or

James J. Maroney (Contact Author)

Northeastern University - D’Amore-McKim School of Business ( email )

404 Hayden Hall
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Boston, MA 02115
617-373-5976 (Phone)
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Jean C. Bedard

Bentley University - Department of Accountancy ( email )

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Waltham, MA 02452
United States
781-891-2410 (Phone)
781-891-2896 (Fax)

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