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To investigate the nature of investment expertise and factors affecting the information processing and performance of investment experts, this paper hypothesizes normative characteristics of investment expertise and compares such characteristics with actual characteristics documented in prior literature on the investment expert. Based on collective evidence from these sources, a model of investment expertise is proposed.

Results support the existence of investment expertise in (1) the nature of knowledge, (2) problem solving and information search, and (3) performance. A variety of factors that could influence the information processing and performance of the investment expert, including personal, cognitive, and contextual elements, are also discussed in the paper and included in the proposed model of investment expertise.

This study contributes to the cognitive processes and expertise research in judgment and decision-making in auditing. It uses the levels-of-processing theory (Craik & Lockhart, 1972) to investigate the amount of auditor attention given to information during internal control documentation procedures, and the effect of this attention on internal control information acquisition and risk assessment. Based on levels-of-processing, the attention required to complete an internal control questionnaire (ICQ) is predicted to result in the acquisition of more internal control information than when a completed ICQ is reviewed. In addition, auditors who complete an ICQ should assess control risk more like experts’ than auditors, who review an ICQ completed by another individual. Results suggest that the audit seniors who completed an ICQ retained significantly more internal control information than audit seniors who reviewed an ICQ completed by another individual. This result held when separately examining the internal control strengths and weaknesses. In addition, audit seniors who completed an ICQ-assessed control risk at a level comparable to the control risk assessments of audit managers in the same firm.

On every engagement, auditors are required to obtain a sufficient understanding of the internal control structure to plan the audit and determine the nature, timing and extent of audit tests. The evaluation of control weaknesses is important for error and fraud detection and for the avoidance of audit failure. To document their understanding of client internal control systems, auditors have relied upon two common formats – internal control narratives and flowcharts. The choice of format is important because it can affect the use and interpretation of information. The purpose of this study is to examine if documentation format affects performance. Results suggest that, while documentation format did not affect performance, internal auditing experience was important, regardless of the documentation format used.

The purpose of this study is to examine the extent to which accountants, internal auditors, and certified fraud examiners use fraud prevention and detection methods, and their perceptions regarding the effectiveness of these methods.

A survey was administered to 86 accountants, internal auditors and certified fraud examiners.

The results indicate that firewalls, virus and password protection, and internal control review and improvement are quite commonly used to combat fraud. However, discovery sampling, data mining, forensic accountants, and digital analysis software are not often used, despite receiving high ratings of effectiveness. In particular, organizational use of forensic accountants and digital analysis were the least often used of any anti‐fraud method but had the highest mean effectiveness ratings. The lack of use of these highly effective methods may be driven by lack of firm resources.

Organizations should consider the cost/benefit tradeoff in investing in highly effective but potentially underutilized methods to prevent or detect fraud. While the costs may seem prohibitive for small organizations, substantial cost savings from reduced fraud losses may also be significant.

By identifying methods that work well for fraud detection and prevention, prescriptive information can be provided to accounting practitioners, internal auditors, and fraud examiners.

In the future, paperless audits will become commonplace as audit clients increasingly shift to paperless systems and audit software is developed that allows auditors to complete most procedures on‐line. To audit on‐line systems, auditors will have to incorporate on‐line audit software as their primary audit tool and gather evidence electronically. Assesses the current impact of technology on the audit process, and discusses the future implications of technological trends for the auditing profession. More specifically, provides a summary of how information technology has impacted audit planning, testing, and documentation.

The objective of this paper is to gain an understanding of the multiple ways companies are using performance measures throughout the organization in the areas of strategic planning, monitoring operations, and evaluation of employees work and satisfaction with the company and suppliers.

A survey was developed and distributed to internal auditors to gather information on how their companies used performance measures.

The results suggest that most companies tend to have an internal focus when using performance measures and place less value on benchmarking with competitors and suppliers.

Based on the results of the survey, performance measures are used throughout the organization for numerous reasons from the determination of whether strategic goals are being met to evaluation of suppliers.

Experts contend that knowledge of the personal labor market penalties (loss of employment and future wealth) incurred by past chief executive officers (CEOs) forced to restate their firms' earnings may induce current CEOs to refrain from fraudulent disclosures. Because of the increased incidence of earnings restatements and the importance of augmenting investor trust, this paper aims to examine empirically nonprofessional investors' impressions of managerial earnings restatement penalties as fraud deterrents.

The restatement penalties were explored in an experimental setting with nonprofessional investors as subjects. Using an experimental case as a basis, the study compared subjects' predictions of the probability that a CEO would fraudulently report a particular transaction under two general conditions: the absence of a specific fraud deterrent; and the presence of two potential deterrents, earnings restatement penalties and CEO financial statement certifications.

Statistical analyses revealed that investors viewed the earnings restatement penalties as fraud deterrents, providing a level of protection comparable to that offered by financial statement certifications, a mandated practice originally intended to deter fraud. These results suggest that investors' awareness of past restatement penalties could help to enhance the credibility of currently reported earnings.

The investigation of this topic makes two contributions to existing research. First, it provides empirical evidence concerning a potential fraud deterrent (earnings restatement penalties) previously unexamined in prior studies. Second, it represents a new area of inquiry in earnings restatement research, both in topic (the perceived deterrence qualities of restatement penalties) and in method (empirical research vs traditional archival studies).