Accounting Auditin Essay
CHRIS E. HOGAN, Michigan State University MICHAEL S. WILKINS, Texas A&M University 1. Introduction Internal controls over financial reporting (ICOFR) should provide reasonable assurance about the reliability of financial statements by setting in place policies and procedures related to maintaining accounting records, authorizations, and safeguarding of assets.' For such controls to be effective, they should ensure, to the greatest extent possible, that material financial statement misstatements either cannot occur within a given functional area or will be detected and corrected by management before financial reports are …show more content…
* Accepted by Michael Willenborg. We gratefully acknowledge the helpful comments and suggestions of two anonymous reviewers. Hemang Desai, Neil Fargher, Steve Fortin, Audrey Gramling, Brian Mayhew, Linda Myers, Mark Nigrini, Tom Omer, Jaime Schmidt, Senyo Tse, Michael van Breda, workshop participants at Indiana University, Michigan State University, Texas A&M University, Texas Tech University, and the University of Houston, and participants at the 2005 Haskell & White Corporate Govemance Seminar, the 2005 Canadian Academic Accounting Association Conference, and the 2005 American Accounting Association Annual Meeting for helpful comments and suggestions.
Contemporary Accounting Research Vol. 25 No. 1 (Spring 2008) pp. 219-42 © CAAA doi:10.1506/car.25.1.9
Contemporary Accounting Research
Prior studies examining the relationship between risk factors and auditor effort find mixed evidence on whether auditors' behavior is actually consistent with the audit risk model. Studies such as Mock and Wright 1993, Mock and Wright 1999, and Bedard 1989 use data from the working papers of actual audit engagements and examine the association between client risks and variations in audit plans. The overall conclusion of