| This study examines the potential for schema-based inferential errors and memory-conjunction errors (miscombinations of items in memory) in the audit judgment process. Specifically, this research investigates the potential for such errors in a multi-tasking environment using practicing audit professionals. The study also examines the possible mitigating effects of inherent risk on memory-related errors. This study is one of the first to determine that memory-conjunction errors, a well-documented phenomenon in the psychology literature, occur in an auditing context.;The subjects in the experimental study were required to read inventory memorandums about hypothetical audit clients, and subsequently made recognition judgments regarding audit evidence. They were also asked to rate the confidence they possessed in their judgments.;Studies on memory suggest that experienced auditors may abstract information into predictable patterns, or schemata. The results of this study suggest that the auditors may have relied on their schematic memories, since it was found that auditors made significantly more inferential errors that were consistent, versus inconsistent, with the schema of a company. This research also indicates that auditors are susceptible to memory-conjunction errors, in which audit evidence from two separate clients is miscombined, or incorrectly merged. Auditors were more apt to miscombine audit evidence when the evidence evaluated was consistent, versus inconsistent, with a relevant schema. Auditors may be particularly susceptible to memory-conjunction errors due to their simultaneous exposure to a number of different clients.;Prior audit research indicates that, under certain conditions, the presence of high inherent risk mitigates the effects of memory-based errors (e.g., Sprinkle & Tubbs, 1996). However, Sprinkle & Tubbs studied auditors' memory for statements of information related to a single client. There does not appear to be prior research on auditors' schematic memory in a multi-tasking environment. The results of this study indicate that inherent risk does not mitigate schema-related errors in a multi-tasking environment, where auditors may need to remember information about more than one client. This finding is of particular significance to auditors; due to their experience with numerous clients, auditors are likely to encounter many situations in which schema-based memory errors could occur. |
