Two Decades of Behavioral Research on Analytical Procedures: What Have We Learned?

Messier, W. F., Jr., C. A. Simon and J. L. Smith. 2013. Two decades of behavioral research on analytical procedures: What have we learned? Auditing: A Journal of Practice & Theory (February): 139-181.

Posted: 28 Jul 2011 Last revised: 20 May 2015

See all articles by William F. Messier, Jr.

William F. Messier, Jr.

NHH Norwegian School of Economics

Chad Simon

Utah State University - School of Accountancy

Jason L. Smith

University of Nevada, Las Vegas

Date Written: September 28, 2012

Abstract

This paper presents a comprehensive review of behavioral research on external auditors' use of analytical procedures published over the past two decades. We frame our review around four phases of the analytical procedures process: develop an expectation, establish a tolerable difference, compare the expectation to the recorded amount and investigate significant differences, and evaluate explanations and corroborative evidence. We find that while considerable research has focused on auditors' performance of the latter phases of the analytical procedures process (i.e., investigate significant differences and evaluate explanations and evidence), relatively less research has focused on the initial phases of the process (i.e., setting expectations and establishing thresholds). We also find that prior research has primarily focused on the preliminary and substantive analytical procedure settings with little research examining auditors' judgments and decisions when using analytical procedures at the overall review stage of the audit engagement. Finally, we summarize the significant findings from research in each phase and provide a number of research questions whose answers could improve our understanding and the performance of analytical procedures.

Keywords: analytical procedures, risk assessment procedures, auditing standards

JEL Classification: M41

Suggested Citation

Messier Jr, William F. and Simon, Chad A. and Smith, Jason L., Two Decades of Behavioral Research on Analytical Procedures: What Have We Learned? (September 28, 2012). Messier, W. F., Jr., C. A. Simon and J. L. Smith. 2013. Two decades of behavioral research on analytical procedures: What have we learned? Auditing: A Journal of Practice & Theory (February): 139-181., Available at SSRN: https://ssrn.com/abstract=1898279 or http://dx.doi.org/10.2139/ssrn.1898279

William F. Messier Jr (Contact Author)

NHH Norwegian School of Economics ( email )

Helleveien 30
N-5045 Bergen
Norway
678-386-8634 (Phone)

Chad A. Simon

Utah State University - School of Accountancy ( email )

School of Accountancy
Jon M. Huntsman School of Business
Logan, UT 84322-3540
United States

Jason L. Smith

University of Nevada, Las Vegas ( email )

4505 S. Maryland Parkway
Las Vegas, NV 89154
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
1,312
PlumX Metrics