Why not adjust detected misstatements in financial statements?

Understanding the judgment and decision-making process of auditors is important to understand how audit quality can be achieved. Especially the decision-making concerning adjusting detected misstatements in the financial statements is important to understand. However, despite numerous experimental studies in this area, only a few studies were able to use the actual auditor’s working papers. In this unique study we were able to examine the decision-making based on working-papers of 850 audit engagements.


Title: The Joint Role of Auditors' and Auditees' Incentives and Disincentives in the Resolution of Detected Misstatements

Authors: Stephen Kwaku Asare, Joost P. van Buuren, and Barbara Majoor

Journal: AUDITING: A Journal of Practice & Theory, February 2019, Vol. 38, No. 1, pp. 29-50

Read the full article: https://aaapubs.org/doi/full/10.2308/ajpt-52153

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