Decision Aids In Control Risk Assessments: Does The Metric Matter?

Abstract

Auditors have witnessed rapid growth in judgment facilitating decision aids. In light of the litigious nature of the profession, this research sounds a cautionary note with regard to the development of control risk assessment decision aids. Our results indicate that the linguistic and numeric techniques can yield different risk assessments depending on factors such as the strength of the control environment, the type of account, and the management assertion being examined. While neither technique is consistently superior to the other, the results suggest further exploration of the inconsistencies in these assessments prior to their development and use.