Auditors' internal control opinions: do they influence judgments about investments?

Abstract

Purpose

The purpose of this paper is to examine the impact of internal control opinions on individuals' judgments about investments.

Design/methodology/approach

The approach used is a behavioral experiment where risk assessments and judgments about investments are made for four internal control opinion scenarios.

Findings

The results indicate that the type of internal control opinion made no difference for either risk assessments or investment decisions.

Research limitations/implications

Participants are provided with data sets that do not contain all of the information they may acquire when they make actual investment decisions. Also, there is a lack of real consequences for making good or poor investment decisions.

Practical implications

The type of internal control opinion has no effect on risk assessments or investing intentions. Thus, other considerations apparently dominate internal control opinions when making judgments about investments.

Originality/value

This is the first paper to examine whether intentions to invest might be affected by internal control opinions.

Citation

Schneider, A. (2009), "Auditors' internal control opinions: do they influence judgments about investments?", Managerial Auditing Journal, Vol. 24 No. 8, pp. 709-723. https://doi.org/10.1108/02686900910986376