Mascha Task Complexity Audit Meeting

The Effects of Task Complexity and Skill on Over/Under Estimation of Internal Control Maureen Francis Mascha Marquette University Cathleen L. Miller Wayne State University Legislation and audit standards require auditors to assess internal control environments to reasonably assure the controls detect/prevent material misstatements. Incorrect assessments can lead to too much or too little audit testing, resulting in inefficient or ineffective audits. The direction of an incorrect assessment is equally important to its size. We examine whether task complexity leads to over/under control risk assessments. Using Bonner’s (1994) model, auditor skill, and audit work programs, we examine the relationship between task complexity and control risk assessment. Using a laboratory experiment with senior accounting students enrolled in auditing at three Midwest universities, we find task complexity and skill level affect control risk assessments – high and low skilled auditors assess control risk too high when performing several, simple risk assessments. High and low skilled auditors improve risk assessments when performing several, complex risk assessments. We find work programs do not significantly affect control risk assessments. Key Words: Internal Control, Task Complexity, Skill, Control Risk Assessment. 1The Effects of Task Complexity and Skill on Over/Under-estimation of ...