Using Audit Programs to Improve Auditor Evidence Collection

Abstract

Auditors experience difficulty auditing accounts on which it is difficult to identify in advance all the evidence necessary to perform an effective audit. These accounts are challenging because they commonly require auditors to collect additional, relevant evidence in response to new information received during evidence collection. We address this experimentally by examining whether changing the focus of audit programs from plan-focused (i.e., focused on the planned audit procedures) to goal-focused (i.e., focused on the task goal) improves auditors’ collection of relevant evidence that is not identifiable at audit program creation. We expect goal-focused auditors to remain open to more ways to achieve their goal. Consequently, we expect and find that goal-focused auditors collect more effective evidence than plan-focused auditors and follow-up more effectively on this evidence. This suggests that a goal-focused approach improves audit quality on tasks requiring auditors to flexibly respond to new information.

Keywords: audit programs, audit planning, evidence collection, goals

JEL Classification: M4, M42, M48