Recency Effects on Auditors' Belief Revision Process: Evidence From Hong Kong

Abstract

ABSTRACT Prior research has found that auditors' belief revisions are influenced by the order of evidential presentation which is generally referred to as “recency effects”. This study adds to that body of research by providing evidence on auditors' belief revision processes in the Hong Kong environment. The findings are based on an experiment in which 118 auditors from 10 audit firms were asked to complete a questionnaire on an internal control case using a short series of complex, mixed audit evidence in a step-by-step response mode. Four pieces of audit evidence (two positive and two negative) were presented to the subjects in two different orders (++—, −++). Subjects were asked to revise their degree of belief that the internal control system can prevent or detect material errors after examining each piece of evidence. The data were analyzed by one-way and two-way analysis of variance (ANOVA). The results indicated that significant recency effects existed in the auditors' belief revision process. Howe...