IDEAS home Printed from https://ideas.repec.org/a/taf/euract/v17y2008i3p559-585.html
   My bibliography  Save this article

On the Conditions under which Audit Risk Increases with Information

Author

Listed:
  • Yasuhiro Ohta

Abstract

It has been reported in the literature on strategic auditing that audit risk (the probability of audit failure) may increase when the auditor obtains information, whereas conditions for such cases have not been identified as yet. This paper provides simple models to analyze the general tendencies of exogenous parameters for such cases. The analysis shows that audit risk increases with more information if the auditee has a sufficiently strong incentive to commit fraud. If the auditee is penalized by auditor rejection even when he does not commit fraud, the detection risk increases with more information. In this case, if the auditor has a sufficiently strong incentive to avoid false rejection, audit risk increases with more information.

Suggested Citation

  • Yasuhiro Ohta, 2008. "On the Conditions under which Audit Risk Increases with Information," European Accounting Review, Taylor & Francis Journals, vol. 17(3), pages 559-585.
    • Handle: RePEc:taf:euract:v:17:y:2008:i:3:p:559-585
    DOI: 10.1080/09638180802109588
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/09638180802109588
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09638180802109588?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fandel, G. & Trockel, J., 2013. "Avoiding non-optimal management decisions by applying a three-person inspection game," European Journal of Operational Research, Elsevier, vol. 226(1), pages 85-93.
    2. Konstantinos Eleftheriou & Iliya Komarev & Paul Klumpes, 2023. "Regulating the Market for Audit Services: A Game Theoretic Approach," Abacus, Accounting Foundation, University of Sydney, vol. 59(3), pages 697-734, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:euract:v:17:y:2008:i:3:p:559-585. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REAR20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.