Evaluation of Management’s Judgements: The Auditor’s Achilles’ Heel

Abstract

The auditor′s responsibility for detecting management fraud of a material nature is affirmed. Auditors are vulnerable to failure when they perform substantive procedures concerned with matters such as asset valuation. Some auditors have tended to “audit to” management representations, a phenomenon known as anchoring to statisticians. Yet, the technology has become available for an independent approach to audit verification of management judgements and estimates; public on‐line databases will play an important role in helping the auditor to understand the client, and to validate individual accounts.

Citation

Pomeranz, F. (1990), "Evaluation of Management’s Judgements: The Auditor’s Achilles’ Heel", Managerial Auditing Journal, Vol. 5 No. 4. https://doi.org/10.1108/02686909010141706