Auditor effectiveness and efficiency in workpaper review: The impact of regulatory focus
Abstract
This study investigates the relationship between regulatory focus and auditor efficiency and effectiveness in audit workpaper review tasks. The results of a controlled experiment suggest that auditors with a promotion focus are faster than auditors with a prevention focus in terms of detecting errors in workpapers, whereas auditors with a prevention focus are more accurate than auditors with a promotion focus. In-depth analyses demonstrate that the difficulty level of errors has a moderating effect on the relationship between regulatory focus and auditor efficiency and effectiveness. While auditors with a promotion focus are faster in detecting simple surface, complex surface, and simple contextual errors, they are slower in detecting complex contextual errors than auditors with a prevention focus. In addition, we find that auditors with a prevention focus are more accurate in detecting only complex contextual errors than auditors with a promotion focus and that there are no significant differences in terms of accuracy for the other types of errors. Implications for audit workpaper reviews are discussed.
Publication Title
Academy of Management 2007 Annual Meeting: Doing Well by Doing Good, AOM 2007
Recommended Citation
Liang, H., Xue, Y., & Wu, L. (2007). Auditor effectiveness and efficiency in workpaper review: The impact of regulatory focus. Academy of Management 2007 Annual Meeting: Doing Well by Doing Good, AOM 2007 Retrieved from https://digitalcommons.memphis.edu/facpubs/11029
