Date of Award

5-2022

Degree Type

Honors College Thesis

Academic Program

Finance BSBA

Department

Finance, Real Estate, and Business Law

First Advisor

Reginald Wilson, Ph.D.

Second Advisor

Marvin Bouillon, Ph.D.

Third Advisor

Sabine Heinhorst, Ph.D.

Advisor Department

Accounting

Abstract

The present study investigates whether retail investors believe that a CPA firm’s liability exposure or the type of evidence collected by the firm impacts their ability to remain unbiased during the audit. This study is inspired by calls for further research pertaining to the benefits and effectiveness that big data can provide to the audit industry or whether it could lead to more regulation. After receiving approval for the study by the Institutional Review Board, retail investors responded to an experiment in order to gather information for the study. The results indicate that retail investors believe that a CPA firm’s decision will not be biased by neither the firm’s liability exposure nor by the type of evidence the firm collects. These results are useful to accounting lawmakers who previously expressed concern that a reduction of liability would impair auditors’ judgment during the audit. Similarly, these results may assist accounting lawmakers in deciding whether or how to change auditing standards to reflect the benefits of big data in auditing.

Keywords: Audit Evidence, Limited Liability Agreement, Sampling, Full Population Testing, Big Data.

Included in

Accounting Commons

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