The audit review process and sensitivity to information source objectivity

Auditing standards require auditors to consider the reliability of the evid ence they use in making judgments. One aspect of that reliability is the ob jectivity of the information source. More objective sources (e.g., third pa rties) provide higher quality information than less objective ones (e.g., c lient personnel), so auditors should be sensitive to the source of the info rmation they receive. In this study, we examine the effect of the role that auditors perform on their sensitivity to information source objectivity. S pecifically, we test whether sensitivity varies depending on whether the au ditor is the preparer of the workpaper or the reviewer of the workpaper in the task of evaluating the adequacy of an allowance for doubtful accounts. It is hypothesized that processing differences between the two roles will c ause reviewers to be more sensitive than preparers to the objectivity of th e information source. In an experiment, auditors were assigned to either a preparer or reviewer role in an accounts receivable task. After calculating or reviewing the allowance for uncollectible accounts, the auditors were g iven new information (from either a client source or an independent credit agency) and asked to reconsider their original decision. Results indicate t hat reviewers were sensitive to the source of the information, while prepar ers were not. These findings suggest that reviewers may use different cogni tive processes than preparers and that the review process serves an importa nt function beyond that of simply a second opinion.