Date of Award

1994

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

First Advisor

C. Edward Arrington

Abstract

Motivated by recent attention given to the independent auditor's role in detecting red flags, this dissertation investigates the effect of time pressure on auditors' attention to red flags in the auditing environment. In so doing, the earlier work of McDaniel (1990) investigating the effects of time pressure on the auditor's ability to execute auditing tests of details is extended. Authoritative sources indicating that red flag detection is performed as a subsidiary task in a multi-task auditing environment are presented. The Easterbrook hypothesis, which holds that a progressive reduction in the range of cue utilization accompanies increases in arousal, provides theoretical support for the prediction that under time pressure auditors' attention will become more focused on the primary task of executing auditing tests of details at the expense of attention given to the subsidiary task of red flag detection. McDaniel's (1990) test instrument was modified by seeding red flags within the text and data associated with a hypothetical audit client. This instrument was administered to practicing independent auditors at varying levels of time pressure. Results consistent with the theoretical expectations are presented. The results suggest that auditors under high time pressure may be less likely to attend to and understand red flags than auditors under low time pressure. Furthermore, the results suggest that the performance decrements associated with the red flag detection task may be observed at a lower level of time pressure than decrements in the accuracy with which auditing tests of details are executed.

Pages

138

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