The Effect of Litigation Risk and Task Complexity on the Auditors’ Reliance on Decision Aids An Experimental Study

Document Type : Original Article

Authors

1 Accounting Department Faculty Of Commerce Alexandria University Egypt

2 Accounting Department Faculty of Commerce Alexandria University Alexandria Egypt

3 Accounting department Faculty of commerce Alexandria University Eslsca University

Abstract

The purpose of this study is to examine the effect of litigation risk and task complexity on auditors’ reliance on decision aids. The importance of this study arises from the benefits that auditors gain as a result of relying on the decision aids. The reliance on decision aids results in more accurate decision, improving effectiveness, efficiency and audit quality. Accordingly, the research hypotheses were developed to suggest that auditors will choose to rely on decision aids in high levels of litigation risk or high levels of task complexity. To test the hypotheses, an experimental design is used and a sample of 80 auditors working for big 4 and non-big 4 auditing firms. The study used two independent variables which are litigation risk; manipulated into two levels (high and low) and task complexity; manipulated into two levels (high and low). The dependent variable is the extent of auditor’s reliance on decision aids measured by dividing the levels of reliance using a Likert scale from 1 to 5 Results indicated that auditors are not likely to rely on decision aids with high levels of risk and more complex tasks, instead, they prefer to depend on their personal judgment. In addition, results showed that auditors working in big 4 firms may choose to rely on decision aids more than who are working in non-big 4 auditing firm.

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