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Are audit programs responsive to audit risk Open Access


Other title
audit programs
audit risk
Type of item
Degree grantor
University of Alberta
Author or creator
Luo, Le
Supervisor and department
Jamal, Karim (Accounting and Management Information Systems)
Examining committee member and department
Boritz, Efrim (School of Accounting and Finance, University of Waterloo)
Gao, Yanmin (Accounting and Management Information Systems)
Zhang, Peng (Mathematical and Statistical Sciences)
Deephouse, David (Strategic Management and Organization)
Maier, Michael (Accounting and Management Information Systems)
School of Business

Date accepted
Graduation date
Doctor of Philosophy
Degree level
Professional standards require the auditor to change the nature, extent, and timing of testing and/or use more skilled labor as the risk of misstatements increases. This study investigates whether auditors adjust audit programs (detection) and/or the thresholds to record and require correction of detected misstatements in response to increases in audit risk and client size. Prior research from several countries indicates that audit programs are too static and are not risk adjusted (Mock and Wright 1993; Quadackers et al. 1996; Mock and Wright 1999). In addition, a key concern is that economic dependence on the client may cause the audit firm to refrain from recording and requiring correction of detected misstatements for larger clients. Archival records from 10 Chinese audit firms are examined to assess audit procedures, audit labor and the audit posting thresholds used. Results of the study indicate that when audit risk or client size increases, the audit firm does not change its audit procedures or use more skilled labor, nor does it detect audit differences in different types of accounts. The audit firm detects a larger number of audit differences for larger clients. The audit firm also uses lower thresholds to record and require correction of detected misstatements in response to increases in audit risk and client size.
License granted by LE LUO ( on 2010-11-02T01:09:23Z (GMT): Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. Where the thesis is converted to, or otherwise made available in digital form, the University of Alberta will advise potential users of the thesis of the above terms. The author reserves all other publication and other rights in association with the copyright in the thesis, and except as herein provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.
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