Electronic vs. Face-to-Face Review: The Effects of Alternative Forms of Review on Auditors' Performance

Posted: 1 Jun 2004

See all articles by Joseph F. Brazel

Joseph F. Brazel

North Carolina State University - Poole College of Management - Department of Accounting

Christopher P. Agoglia

University of Massachusetts at Amherst

Richard C. Hatfield

University of Alabama

Multiple version iconThere are 2 versions of this paper

Abstract

Due to recent technological advancements such as online workpapers and e-mail, audit firms have alternative methods of workpaper review that they did not have in the past. While audit workpaper preparers typically know they will be reviewed, and know the form their review will take, prior research has focused on comparing the judgments of auditors who expect to be reviewed with auditors who expect to remain anonymous. This study examines the effects on preparers of using two different methods of review: face-to-face and electronic review. The study also compares both review groups to a no-review control group. Consistent with the Heuristic-Systematic Model, we find that the method of review affects preparer effectiveness and efficiency. Specifically, preparers anticipating a face-to-face review are more concerned with audit effectiveness, produce higher quality judgments, are less efficient at their task, are less likely to be influenced by prior year workpapers, and feel more accountable than preparers in both the electronic review and no-review conditions. Interestingly, electronic review preparers generally do not differ from the no-review group. These results suggest that how a review will be conducted, and not merely the expectation that a review will occur, affects the decision maker's judgments and perceptions.

Keywords: Review process, audit effectiveness, audit efficiency, accountability, heuristic-systemic model

JEL Classification: M40, M41, M49

Suggested Citation

Brazel, Joseph F. and Agoglia, Christopher P. and Hatfield, Richard C., Electronic vs. Face-to-Face Review: The Effects of Alternative Forms of Review on Auditors' Performance. Available at SSRN: https://ssrn.com/abstract=552681

Joseph F. Brazel

North Carolina State University - Poole College of Management - Department of Accounting ( email )

Campus Box 8113
Nelson Hall
Raleigh, NC 27695
United States
919-513-1772 (Phone)

Christopher P. Agoglia (Contact Author)

University of Massachusetts at Amherst ( email )

Department of Accounting & Information Systems
121 Presidents Drive
Amherst, MA 01003-4910
United States
413 545-5582 (Phone)
413 545-3858 (Fax)

Richard C. Hatfield

University of Alabama ( email )

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States
205 348-2901 (Phone)

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