A Review and Model of Auditor Judgments in Fraud-Related Planning Tasks

A Journal of Practice and Theory, Forthcoming

54 Pages Posted: 10 Feb 2011 Last revised: 20 Jun 2011

See all articles by Jacqueline S. Hammersley

Jacqueline S. Hammersley

University of Georgia - J.M. Tull School of Accounting

Date Written: June 2011


In this paper, I develop a model that describes auditor and fraud risk factor characteristics that I expect to affect auditor performance in fraud-related planning tasks (i.e., fraud hypothesis generation, risk assessment, and audit program modification). I expect that auditor knowledge, especially fraud knowledge, will significantly affect auditor performance in audit program modification tasks through its effects on fraud risk factor identification and hypothesis generation. Further, due to fraud’s rarity, I expect that this knowledge is acquired primarily through indirect experience such as training rather than from direct experience and is enhanced when auditors have better problem solving skills and higher epistemic motivation. This is a significant departure from knowledge acquisition in other audit settings and there is currently no evidence in the literature examining these relationships. I also propose that the diagnosticity of fraud risk factors and specifically, the degree to which they support generation of specific testable fraud hypotheses, affects auditors’ ability to plan effective changes to audit programs. Finally, I review and summarize the extant fraud-related audit planning literature and identify opportunities for future research.

Keywords: Fraud, Risk Assessment, Hypothesis Generation, Audit Planning

JEL Classification: M40, M41, M42

Suggested Citation

Hammersley, Jacqueline S., A Review and Model of Auditor Judgments in Fraud-Related Planning Tasks (June 2011). A Journal of Practice and Theory, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1758097 or http://dx.doi.org/10.2139/ssrn.1758097

Jacqueline S. Hammersley (Contact Author)

University of Georgia - J.M. Tull School of Accounting ( email )

Athens, GA 30602
United States

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