An Empirical Investigation of the Impact of the Anchor and Adjustment Heuristic on the Audit Judgment Process
Abstract
This research investigated the operation of the anchor and adjustment heuristic in the environment of the continuing audit engagement. Specifically, the impact of information concerning the previous year's compliance test results was measured over several reported error rates from the current year's compliance test results. The experimental instrument was applied to two classes of participants, audit practitioners from both public accounting and a government audit service. Each participant was required to supply a estimate of the total population error rate using the information given and the risk assessment methodology. The results of this empirical investigation determined that the addition of prior year information appears to moderate the impact of the anchor and adjustment heuristic by reducing the participants' confidence that the statistical sample error rate represents an acceptable population error rate.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1988
- Accession Number
- ADA196481
Entities
People
- Anthony H. Presutti Jr.
Organizations
- Air Force Institute of Technology