The Effect of Client vs. Decision Aid as a Source of Explanations upon Auditors' Sufficiency Judgments: A Research Note

This study examines whether auditors will rate explanations for an unusual fluctuation provided by a decision aid as more sufficient than the same explanations provided by a client, when the explanations are insufficient to account for the fluctuation. While prior research has addressed auditors' sensitivity to the source reliability of various parties (e.g., client management, outside parties), little is known about auditors' perceptions of decision aids as an information source. Since a decision aid may be viewed as a highly objective source, auditors may tend to over-rate the sufficiency of explanations provided by a decision aid vs. those provided by a client. Our results show that auditors rated explanations provided by a decision aid as more sufficient than the same explanations provided by the client, when in fact the explanations were insufficient. These results suggest that more consideration be given to the impact of decision aids utilized in analytical review.