Consequentiality, justification and auditors' decision processes: A theoretical framework and two experiments

Justification demands pervade auditing, yet little is known regarding their effects on auditors' decision processes (e.g., Ashton 1990; Gibbins and Newton 1993; Solomon and Shields, in press). In this dissertation, I develop a framework for predicting when justification demands are likely to be of significant influence. Additionally, I decompose the cognitive task of justifying into several interdependent steps, highlighting how justification can both directly and indirectly influence auditors' judgment and decision making. Based on my theoretical development, I devise two experiments within a planning stage analytical procedures context--one using undergraduate auditing students and one using auditors possessing two to seven years of experience. To assure a meaningful level of consequentiality, all participants were asked to sign their experimental instrument and were advised of further follow-up procedures. Results indicate that justifiee preferences, client-specific cues and requests for lists of alternative explanations interactively influenced how readily subjects accepted client explanations, how extensively they spontaneously searched for alternative causes (cf., Koonce 1992), and the extent to which they relied on the congruence heuristic to judge the diagnosticity of evidentiary questions (cf., Baron, Beattie and Hershey 1988). I discuss implications of the thesis for building a more complete theory of justification with an emphasis on how client-specific cues and audit task requirements can interact with justifiee preferences to directly and indirectly influence how auditors' decision processes. I conclude the thesis by discussing avenues for future research, noting the importance of bridging justification research on the decision processes of individual auditors with research that investigates the interdependence amongst auditors inherit in the audit review process (Rich, Solomon and Trotman 1994; Solomon 1987).U of I OnlyETDs are only available to UIUC Users without author permissio