Question

ocate and read the article listed below and answer the following questions. Hall, T. W., J. E. Hunton, and B. J. Pierce. 2002. Sampling practices of auditors in public accounting, industry and govern- ment. Accounting Horizons 16 (2): 125–136. http://www.aaajournals.org/doi/pdf/10.2308/acch.2002.16.2.125 I need better answers then the ones provided by the textbook solutions. a.) What is the issue being addressed in the paper? ☝️Need detail answer on that particular question with example

Answer 1

a. The issue being addressed in the paper is with regards to the limited understanding of the sampling practices of auditors in public accounting, industry and government. Auditors in public accounting, industry and government mostly rely on non-statistical methods for the purpose of sample planning, selection as well as evaluation. Despite the reliance on non-statistical methods for the purpose of sample planning majority of the auditors had no training in debiasing techniques. Auditors also relied on employer guidelines and sampling standards as provided by American Institute of Certified Public Accountants.

The paper, in simple words, raises the issue of non-competence of auditors with regards to the sampling practices being used by them. For instance the article says that only 8 percent of the total respondents had received a formal training with regards to avoidance of selection biases. This led to the auditors to wrongly perceive that non-statistical selection biases are minor. Moreover another key issue was that the respondents did not use any procedures for the purpose of mitigating any selection biases when they were using non-statistical selection methods.

Thus the paper addresses the gaps that exist in the domain of non-statistical methods being largely used. Clearly additional time class and materials should be given to non-statistical methods and this will help auditors to gain a better understanding of the weaknesses of these methods and how can they optimally deal with these weaknesses.