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The impact of extensive audit experience on internal control evaluation

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Chew, Tong Gunn (1996) The impact of extensive audit experience on internal control evaluation. Research Master thesis, University of Tasmania.

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Abstract

This study investigates the effect of extensive internal control audit experience on
internal control evaluation. Prior studies have examined the effect of industry
experience on specific audit knowledge and the effect of general audit experience on
internal control knowledge/performance. However, there has been no known study
that examines the effect of extensive internal control audit experience on multiple
measures of internal control performance. Extensive internal control audit experience
includes compliance based audit experience and financial institution audit experience.
Auditors with predominantly compliance based audit experience perform a higher
level of compliance testing compared to auditors with predominantly substantive
based audit experience. Auditors with financial institution audit experience are more
frequently exposed to internal control review due to the audit requirement specified in
AGS 1008, Audit Implications of Reserve Bank Prudential Reporting Requirements.
Due to the frequent exposure to internal control review, auditors with these extensive
audit experiences are expected to attain a higher level of knowledge accuracy,
consensus between subjects and self insight within subjects. The study also examines
the effect of the level of knowledge on internal control evaluation. It is predicted that
subjects with a higher level of knowledge will attain a higher level of consensus and
self insight.
Results indicate that there are significant differences in the levels of knowledge
accuracy, consensus and self insight between student and auditor subjects except for
the level of consensus between auditors with predominantly substantive based audit
experience and students. Auditors with predominantly compliance based audit
experience exhibit a significantly higher level of consensus compared to auditors with
predominantly substantive audit experience but neither a higher level of knowledge
accuracy nor self insight. There are no significant differences in the performance of
auditors with and without financial institution experience. Furthermore, there are no
significant differences in the level of accuracy of consensus and self insight between
the high knowledge group and the low knowledge group.
The results indicate that compliance based audit experience may be a useful factor in
training an auditor to become an expert in internal control evaluations, as evidenced
by firstly, the significant differences in the level of consensus between auditors with
compliance based audit experience and auditors with substantive based audit
experience; and secondly, the lack of significant difference in the level of consensus
between auditors with predominantly substantive audit experience and students.
Furthermore, it is clear that some experience as opposed to no experience plays a key
role in the accumulation of knowledge and performance of internal control evaluation.

Item Type: Thesis (Research Master)
Copyright Holders: The Author
Copyright Information:

Copyright 1996 the Author - The University is continuing to endeavour to trace the copyright
owner(s) and in the meantime this item has been reproduced here in good faith. We
would be pleased to hear from the copyright owner(s).

Additional Information:

Investigates the effect of extensive internal audit control experience on multiple measures of internal control performance. The audit experience includes compliance based audit experience and financial institution audit experience. Thesis (M.Comm.)--University of Tasmania, 1997. Includes bibliographical references. Investigates the effect of extensive internal audit control experience on multiple measures of internal control performance. The audit experience includes compliance based audit experience and financial institution audit experience

Date Deposited: 25 Nov 2014 00:46
Last Modified: 11 Mar 2016 05:55
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