The Hidden Advantage of Disaggregation in Substantive Analytical Procedures

Recent Public Company Accounting Oversight Board (PCAOB) inspections on substantive analytical procedures have found that auditors often over-rely on management explanations for significant fluctuations by failing to gather and evaluate corroborating evidence. This research attempts to find a remedy for this problem by examining how the use of a disaggregate approach in creating an expectation influences the likelihood that auditors will seek evidence to evaluate management explanations. Based on the elaboration likelihood model, this study hypothesizes that auditors who use a disaggregate approach will be more likely to gather and evaluate evidence for management explanations than auditors who use an aggregate approach. Further, this research uses the heuristic systematic model to hypothesize that auditors who disaggregate will remain more likely to obtain evidence even when the client is credible. In an experiment involving senior auditors, results indicate that auditors are actually more likely to gather and evaluate corroborating evidence when they used aggregated data in developing their expectations. Possible reasons for this finding are explored and implications for practice are discussed.

Name thesis:degree_name

Doctor of Philosophy

Level thesis:degree_level

Campus Only Dissertation

Discipline thesis:degree_discipline

Business Administration

Year

2016

Author dc:creator

• Breger, David

Contributors dc:contributor

• O'Donnell, Ed

Repository record dc:identifier

https://opensiuc.lib.siu.edu/dissertations/1152

OAI identifier oai:identifier

oai:opensiuc.lib.siu.edu:dissertations-2156