The role of audit technology and extension of audit procedures in strategic auditing |
| |
| Institution: | 1. Facultad de Ciencias Astronómicas y Geofísicas. Universidad Nacional de La Plata, Paseo del Bosque S/N, La Plata, Buenos Aires, 1900 Argentina;2. Instituto de Tecnología e Ingeniería. Universidad Nacional de Hurlingham, Tte. Origone 151, Hurlingham, Buenos Aires, 1688, Argentina;3. Instituto de Astronomía y Física del Espacio (IAFE), UBA-CONICET, Intendente Guiraldes S/N, C1428ZAA Ciudad Autónoma de Buenos Aires, Argentina;1. Institute of Accounting and Finance, School of Management, University of Leicester, University Road, Leicester LE1 7RH, UK;2. GRAPES, rue de la Belle Jardiniere, B-4031 Liege, Federation Wallonie-Bruxelles, Belgium;3. University of Macerata, Department of Economics and Law, via Crescimbeni 20, Macerata I-62100, Italy;4. Nuclear Research Laboratory, Astrophysical Sciences Division, Bhabha Atomic Research Center, Srinagar 190 006, Jammu and Kashmir, India;1. Instituto de Ciência e Inovação em Engenharia Mecânica e Engenharia Industrial, Faculdade de Engenharia, Universidade do Porto, Porto, Portugal;2. ICVS/3B''s - PT Government Associate Laboratory, Braga/Guimarães, Portugal;3. Lab on Cardiovascular Imaging & Dynamics, Department of Cardiovascular Sciences, KULeuven - University of Leuven, Leuven, Belgium;4. DIGARC – Polytechnic Institute of Cávado and Ave, Barcelos, Portugal;5. Algoritmi Center, School of Engineering, University of Minho, Guimarães, Portugal;6. Department of Electrophysiology, German Heart Center Munich, Technical University, Munich, Germany |
| |
| Abstract: | This article develops game-theoretic hidden action models for examining the role of noisy audit technology and the extension of audit procedures in deterring material irregularities. We model two different types of games: (1) a game in which the auditor makes the acceptlreject decision after the primary audit, by sometimes going contrary to the audit signal, and (2) a game in which the auditor makes the accept/reject decision after the primary audit or after extending the audit. Nash strategies are analyzed, and the equilibrium behavior involves mixed strategies on the part of the auditor and the auditee. The key results of this analyses are: (1) increasing precision in audit effectiveness may result in increasing material irregularities, and (2) the increase in material irregularities can be avoided if the audit technology, that is, audit effectiveness and audit efficiency, exceeds the required critical values. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
