Experience And The Ability To Explain Audit Findings

This study investigates how experience-related differences in the content and structure of auditors' knowledge of financial statement errors can contribute to the effectiveness and efficiency of their audit decisions. Different audit decision tasks are performed by auditors with differing levels of training and experience. Such differential assignment is specifically mandated in the first standard of fieldwork (AU Section 210), and observations of practice (e.g., Haskins [1987]) indicate some consensus in assignment patterns. The appropriateness of these differential assignments has economic consequences because of the higher salaries paid to more experienced auditors. The existence of differential costs and presumed performance differences increases the importance of appropriately linking training, experience, and the promotion selection process. Nevertheless, researchers have yet to document both reliable experience-related performance differences and the ability' and knowledge differences2