THE EFFECTS OF FAMILIARITY WITH THE PREPARER AND TASK COMPLEXITY ON THE EFFECTIVENESS OF THE AUDIT REVIEW PROCESS

A review of preparers' workpapers can lead to the detection of ''class ification'' errors (i.e., incorrect determinations with respect to sam pled audit items) and/or ''conclusion'' errors (i.e., incorrect conclu sions about populations of audited items). We examined the effects of familiarity with the preparer and task complexity on reviewers' effect iveness at detecting these errors. The results indicate that reviewers of unfamiliar preparers reperform more of the preparers' work but do not detect more classification errors. Preparer familiarity and task c omplexity interactively determined effectiveness at detecting conclusi on errors: when the task was complex, reviewers of familiar preparers detected more conclusion errors than reviewers of unfamiliar preparers . However, performance did not differ on the routine task. Furthermore , reviewers of familiar preparers were more effective on the complex r elative to routine task, but the reverse result was true for reviewers of unfamiliar preparers.