A normative model of the decision process--an application to auditing

Eugenia Fernandez, Purdue University

Abstract

As auditor liability has increased, different models of the audit process have been developed in an attempt to provide more support to auditors and thus lessen their risk of adverse legal judgments. Typically these models have focused on the evaluation of evidence for a particular aspect of the audit without addressing the collection of that evidence. In this thesis a sequential model of audit decision making is proposed which explicitly considers the issue of dynamic information acquisition. In particular the appropriateness and implications of applying a given normative model of decision making to auditing is investigated, with special note taken of the categorization problem. This categorization framework is used to derive sufficient conditions under which strategies are optimal for various audit test characteristics and audit team compositions.

Degree

Ph.D.

Advisors

Whinston, Purdue University.

Subject Area

Management

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