The effects of control risk and litigation risk on decision aid reliance

Mohamed Gomaa, James Hunton, Jacob Rose

Research output: Contribution to journalArticleResearchpeer-review

6 Citations (Scopus)

Abstract

Decision aids hold the potential to improve audit quality; yet, immense legal and regulatory pressures on audit firms to improve audit quality could lead to a check list mentality where auditors subordinate their audit judgements for the sake of compliance. Based on an experiment involving 118 audit practitioners, we find that auditors rely more on decision aid recommendations when either litigation risk or internal control risk is high relative to low. When both risks are simultaneously high, we find that litigation risk amplifies the auditors awareness of legal defensibility, which in turn increases decision aid reliance, even as their confidence in the quality of their judgements deteriorates.
Original languageEnglish
Pages (from-to)80 - 106
Number of pages27
JournalInternational Journal of Applied Decision Sciences
Volume1
Issue number1
DOIs
Publication statusPublished - 2008
Externally publishedYes

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