| The third standard of field work requires that auditors obtain sufficient, competent evidence to support accounting estimates throughout the audit process. This study examines auditors' sensitivity to variation in selected evidence competence and sufficiency characteristics due to technology advances. Specifically, regulators and practitioners have recently proposed that auditors move toward a continuous auditing process to meet the market demand for more timely information. The movement toward a continuous auditing process may result in auditors relying on less competent and/or sufficient evidence. For example, due to time and resource constraints, auditors may be required to depend on evidence from internal rather than external sources. In addition, audits issued simultaneously with period-end may force auditors to consider historical rather than subsequent event evidence. This dissertation hypothesizes that internal control effectiveness, another evidence competence characteristic, may mitigate the above evidence limitations due to implementing continuous auditing. This hypothesis is tested using controlled experimental methods.; This research is important as it synthesizes prior evidence characteristics research by developing a model of the evidence evaluation process. This model is used to (1) analyze prior research results, (2) develop testable hypotheses for this study, and (3) provide direction for future evidence characteristics studies. In addition, this study extends limited prior work examining how evidence characteristics interact by exploring specific interactions between (1) source objectivity and internal control effectiveness, (2) evidence timeliness and internal control effectiveness, and (3) evidence set size and internal control effectiveness. Finally, from a practitioner's perspective, if evidence limitations for accounting estimates can be reduced by effective internal controls, one hurdle to effectively and efficiently implementing continuous auditing may be significantly reduced. |
