Evaluating audit risk: The effects of tolerance-for-ambiguity, industry characteristics, and experience

Abstract

The results of this study support the contention that TFA significantly influences the assessment of audit risk. Auditors with a high TFA perceived less audit risk than auditors with a low TFA. Industry risk also is shown to have a significant influence on the assessment of audit risk at the financial statement level. Higher industry risk was found to be associated with higher perceived audit risk. Lastly, the results indicate that audit experience is not a significant factor in explaining perceived audit risk. Important implications from these results for the overall audit process are provided.

Citation

Makkawi, B.A. and Rutledge, R.W. (2000), "Evaluating audit risk: The effects of tolerance-for-ambiguity, industry characteristics, and experience", Advances in Accounting Behavioral Research (Advances in Accounting Behavioural Research, Vol. 3), Emerald Group Publishing Limited, Bingley, pp. 69-89. https://doi.org/10.1016/S1474-7979(00)03026-X

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