The Impact of Strategic Positioning Evaluation on Auditor Judgments About Business Process Performance

Posted: 15 Jul 2002

See all articles by Brian Ballou

Brian Ballou

Miami University of Ohio - Department of Accountancy

Christine E. Earley

Providence College -School of Business

Jay Rich

Illinois State University - College of Business

Date Written: Undated

Abstract

International accounting firms have implemented new audit methods that assess residual business risks to determine the nature and extent of substantive testing. Understanding strategic risks and the extent to which critical business processes mitigate or accentuate those risks is integral to these methods (Bell, Marrs, Solomon, and Thomas, 1997). However, little is known about how important task features of these new methods affect auditor judgments. We test the effects of changes in the strategic positioning for unrelated business processes (e.g., brand and image delivery) on auditors? evaluations of critical business process performance (e.g., the logistics and distribution process). Results suggest that auditors superficially process information about critical business process performance when a client?s strategic positioning in unrelated business processes is in line with industry norms, which leads to an apparent underweighting of problems present in the critical business process.

Keywords: audit methods, business risk, audit risk, expectancy violation

JEL Classification: M49, M19

Suggested Citation

Ballou, Brian J. and Earley, Christine E. and Rich, Jay S., The Impact of Strategic Positioning Evaluation on Auditor Judgments About Business Process Performance (Undated). Available at SSRN: https://ssrn.com/abstract=300541

Brian J. Ballou

Miami University of Ohio - Department of Accountancy ( email )

310 Laws Hall
Oxford, OH 45056-1675
United States

Christine E. Earley

Providence College -School of Business ( email )

1 Cunningham Square
Providence, RI 02918-0001
United States
401-865-2056 (Phone)
401-865-2978 (Fax)

Jay S. Rich

Illinois State University - College of Business ( email )

Normal, IL 61761
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
1,618
PlumX Metrics