Good auditors sometimes draw different conclusions from quite similar audit evidence. This may result from differences in auditors’ information gathering and processing styles. In particular, differences in auditors’ cognitive styles preferences may lead to differential reliance on base rate evidence. Base rate evidence -- such as information from auditors’ past judgments -- is important because it is both relevant and inexpensive. One line of research suggests under-utilization of such evidence in the opinion forming process; another suggests the opposite. A comparison of methodological differences indicates that the framing of the experimental tasks may be contributing to the conflicting results. This paper presents the results of an empirical investigation of framing effects in evidence use and provides support for the proposition that framing may be an important factor. In addition, the use of cognitive styles models is proposed as a possible basis for explaining individual differences in base rate and sample evidence use.
Karayan, John E.; Burrowes, Ashley; and Hulme, Richard
"AUDITORS’ USE OF BASE RATE EVIDENCE: INSIGHTS FROM A COGNITIVE STYLES MODEL,"
Journal of International & Interdisciplinary Business Research: Vol. 1
, Article 3.
Available at: http://scholars.fhsu.edu/jiibr/vol1/iss1/3