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A study of the effects of accountability and engagement risk on auditor materiality decisions in public sector audits

A study of the effects of accountability and engagement risk on auditor materiality decisions in... Public administration theory suggests that increased accountability in the public sector influences the auditor to lower materiality levels; thereby increasing the audit sample size; which decreases the likelihood of an inappropriate opinion. Accounting theory posits that engagement risk leads the auditor to lower materiality levels to decrease the likelihood of rendering an inappropriate opinion, in an effort to avoid litigation. The results of this study indicate, that in public sector entities, accountability guides the auditors’ materiality decisions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Public Budgeting, Accounting & Financial Management Emerald Publishing

A study of the effects of accountability and engagement risk on auditor materiality decisions in public sector audits

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1096-3367
DOI
10.1108/JPBAFM-12-01-2000-B001
Publisher site
See Article on Publisher Site

Abstract

Public administration theory suggests that increased accountability in the public sector influences the auditor to lower materiality levels; thereby increasing the audit sample size; which decreases the likelihood of an inappropriate opinion. Accounting theory posits that engagement risk leads the auditor to lower materiality levels to decrease the likelihood of rendering an inappropriate opinion, in an effort to avoid litigation. The results of this study indicate, that in public sector entities, accountability guides the auditors’ materiality decisions.

Journal

Journal of Public Budgeting, Accounting & Financial ManagementEmerald Publishing

Published: Mar 1, 2000

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