Discussion of Expert Judgment in Audit Program Planning

Abstract

Joyce has selected an important area of accounting research to investigate. The specific issue addressed here is: given the importance of professional judgment in auditing, and given previous evidence indicating substantial individual differences in judgments concerning the amount of audit work to perform, what specific properties of judgment models can be inferred in a quasi-experimental setting? Given the loss functions being imposed upon public accounting firms for judgmental errors by the courts and the general public, the topic is obviously contemporary and interesting. Aside from the costs of information gathering and usage, analysis of judgment models is mainly of interest if different audit opinions are implied by different evidence-gathering procedures and alternative individual and group judgment models. If decisions concerning, for example, what audit opinion to generate or what particular allocation of resources is appropriate for a specific phase of an audit, are made in a group setting, then the area of group judgment and decision processes is the relevant context. Characteristics of both individuals and groups imply alternative group decisions (Davis [1969]; Davis et al. [1976]). A portion of future work in the auditing area should be concentrated on group processes.