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The role of accounting information system knowledge on audit effectiveness of CPAs in Thailand.
Abstract:
The objective of this study is to investigate advance understanding of the relationships between Accounting Information System Knowledge on Audit Effectiveness via the mediating influences of the Risk Assessment Competency and Quality of Auditor Planning Judgments. Data collection is done by sending the questionnaires to certified public accountants (CPAs) in Thailand; measurements of constructs both the validity and reliability use the Ordinary Least Squares (OLS) regression analysis to test the hypotheses relationship and estimate factors affecting the Audit Effectiveness. The results show the Accounting Information System Knowledge has positive relationships with Audit Effectiveness and is a positively significant on Risk Assessment Competency and Quality of Auditor Planning Judgments. Theoretical, managerial and research implications are also discussed.

Keywords: Accounting Information System Knowledge, Audit Effectiveness, Risk Assessment Competency and Quality of Auditor Planning Judgments

Article Type:
Report
Subject:
Risk assessment
Accountants
Author:
Chaveerug, Aukkaradej
Pub Date:
12/01/2011
Publication:
Name: International Journal of Business Strategy Publisher: International Academy of Business and Economics Audience: Academic Format: Magazine/Journal Subject: Business Copyright: COPYRIGHT 2011 International Academy of Business and Economics ISSN: 1553-9563
Issue:
Date: Dec, 2011 Source Volume: 11 Source Issue: 3
Product:
Product Code: 9912200 Venture Analysis
Geographic:
Geographic Scope: Thailand Geographic Code: 9THAI Thailand
Accession Number:
272484891
Full Text:
1. INTRODUCTION

Independent auditors, also known as certified public accountants (CPAs), conduct audit work to ascertain whether the overall financial statements of a company are, in all material respects, in conformity with the generally accepted accounting principles (GAAP) (Konrath, 2002). Financial statements include Balance Sheets, Profit and Loss Statements, Statements of Cash Flow and Statements of Retained Earning. Generally speaking, what auditors do is to apply relevant audit procedures, in accordance with GAAP, in the examination of the underlying records of a business, in order to provide a basis for issuing a report as an attestation of that company's financial statements (AICPA, 2002). Such written report is called auditor's opinion or auditor's report.

Auditors have to acquire and develop their skills and competences in order to be able to fulfill their mission in a professional manner as required by their professional organizations. One of the major, and growing, domains of the skill and competence requirements consists of information technology [IT] (Kalaba, 2002).

The International Federation of Accountants (IFAC) issued the International Education Standard (IES) 8 Competence Requirements for Audit Professionals which indicates that the knowledge content of the education and development programs should include information technology (IES8, 2010: par.32). Further, the International Education Practice Statement (IEPS) 2 Information Technology for Professional Accountants indicates the IT knowledge and competence requirements in the pre- and post-qualification stages of candidates and of audit professional.

While the use of information technology (IT) in the business world has grown exponentially in the past two decades, the extent to which auditors have adopted IT such as computer assisted auditing techniques to meet this growth remains an empirical question (Arnold and Sutton 1998; Curtis and Payne 2008; Janvrin et al. 2009). The computerized assisted auditing is computer tools that extract and analyze data from computer applications (Braun and Davis 2003). Technology permit auditors to increase their productivity as well as that of the audit function (Brazel et al., 2004; Reed et al., 1990). For example, computerized assisted auditing can automate previously manual audit tests reducing total audit hours expended. In addition, the computerized assisted auditing may be used to select sample transactions meeting specific criteria, sort transactions with specific characteristics, obtain evidence about control effectiveness, and evaluate inventory existence and completeness (AICPA, 2006).

One approach to meeting these increased demands is through the use of audit technologies, which can greatly improve the efficiency (cost) and effectiveness (quality) of an audit (Banker et al., 2002). While the current audit environment intensifies the need for firms to employ techniques that can reduce workload, including those affecting technology implementation decisions, the culture of public accounting may create impediments to the adoption of new technologies by audit teams (Vendrzyk and Bagranoff, 2003).

In the next section, the conceptual framework is presented, and a set of testable hypotheses is proposed. Methods of the study are then introduced, which include information about the sample, study measures, data analysis, and test results. Following a discussion of the results, implications and limitations are offered.

2. RELENANT LETERATURE ON LEARNING ORIENTATION AND INNOVATION CAPABILITY, ORGANIZATION PERFORMANCE, ORGANIZATION AND UNCERTAINTY ENVIRONMENT

The conceptual model shown in Figure 1 was drawn based on the literature review and use the Contingency theory used in accounting research design as in accounting information system and auditing (Change et al., 2003; Nicolaou, 2000) and applied in the context of audit process in this research. Today technology has allowed the production and storage of vast amounts of information. Added to this information has become a key resource in today's business and an ability to effectively manipulate this information has become vitally important to management. This technology is relatively new and requires awareness of the technology, readiness to implement and skills for its effective usage is developed.

2.1 Accounting Information System Knowledge and Audit Effectiveness

Audit Effectiveness refers to the auditors who are an examination of a program, function, operation to assess whether the entity is achieving efficiency and effectiveness in the employment of available resources and improve profitability of responsibility and accountability to the professional, increase the value-added service and enhance working reputation of audit service; which meets or exceeds customer expectations regarding features and performance (Nicolaou, 2000; Crawell et al., 1995).

Accounting Information System Knowledge refers to skill or expertise and knowledge of auditing process about understand and analyze the concentration of controls in an electronic environment; understand information systems and understand the use of computer auditing software. It includes information technology based resources deployment as knowledge assets and physical information technology infrastructure (Yang and Guan (2004). Information technology expertise is a role in enabling auditors to develop new capabilities and skill to accomplish. More, Information technology expertise is the shared information technology capabilities that enable the flow of knowledge in an audit firm and help the auditors to achieve an advantage audit service more than competitors (Yang and Guan, 2004).

The issue of what IT skills and competences should an auditor possess have long been debated in the scientific and professional literature. Cutting et al. (1971: 76-77) considers that auditors should: understand and analyze the concentration of controls in an electronic environment; understand information systems and understand the use of computer auditing software. The authors also stressed the idea that the knowledge acquired should be differentiated depending on the job requirements and the complexity of tasks. Further, Jancura (1975: 59) extended the knowledge requirements of auditors by considering that they should: have sufficient knowledge of information systems to develop the audit plan. Borthick et al. (2006) indicated that "accelerating the acquisition of expertise in auditor's careers is desirable because of increasing demands for audit efficiency and effectiveness, growing sophistication of accounting systems" Borthick et al. (2006: 338). The main result of this article is that there is a correlation between structured training and the competences of auditors.

As Accounting Information System (AIS), the accounting related modules of Enterprise Resource Planning (ERP) Systems, ERP have more dominant and complex. Auditors' abilities to audit around the system such as perform their audit without evaluating the reliabilities of the AIS have been significantly reduced. ERP Systems require auditing capabilities (Lilly, 11997), and a recent study found that AIS knowledge increases auditors' concern for, and recognition of, audit risk in an ERP setting (Hunton et al., 2001). The increased concern and recognition are likely to have implications for auditors for auditors' risk assessments and substantive planning decisions.

The existing literature examining auditor's knowledge in accounting information systems. The authors covered aspects such as: the environment of information systems in financial reporting and assurance; how financial statements auditors acquire and use information systems knowledge and finally, the interaction between financial statements auditors and information systems auditors. We consider that our article embraces Curtis et al. (2009) call for research on how auditors obtain information systems knowledge (Curtis et al., 2009: 79). Therefore, posit the hypothesis as below:

H1: The greater the Accounting Information System Knowledge is, the more likely that the auditors will achieve Audit Effectiveness.

[FIGURE 1 OMITTED]

2.2 Consequences of Accounting Information System Knowledge

2.2.1 Risk Assessment Competency refers to the auditors must gather enough competent evidential matter such that the achieved audit risks are at a level acceptable to the auditor (Hunton et al., 2004). As technology enables to work different, it provides the opportunity to work more closely with clients, to better work in teams, to eliminate waste and perform audit work more effectively and in less time. The auditors apply the audit risk model during the planning phase of the audit by making judgments concerning client risks and the scope of audit risk.

Audit risk is the risk that auditors may unknowingly fail to appropriately auditor's opinion on financial statements that are materially misstated. SAS No.88 (AICPA 1996) states that with the electronic processing of transactions and the reduce reliabilities associated with the resulting audit evidence; auditors may not be able to adequately reduce detection risk by increasing the scope of substantive procedures. The auditors can focus on controls to determine whether they are designed, and use, to assure the accuracy and reliabilities of data in electronic form (AICPA 1996).

The auditors use the computerized assisted auditing that will have automating audit processes and implementing a continuous auditing framework, auditors are able to focus on areas of highest risk, reduce audit time, reduce resources, and will gain more confidence in the effectiveness controls. This will improve overall audit recommendations to management and satisfy the demand for more reliable, relevant, and timely information. In Accounting Information System environments, auditors with greater with Accounting Information System Knowledge will assess control risk at high level. Therefore, posit the hypothesis as below:

H2: The greater the Accounting Information System Knowledge is, the more likely that the auditors will achieve Risk Assessment Competency.

2.2.2 Quality of Auditor Planning Judgments refers to the auditors can apply the technology to helps auditor to comprehensive analytical typically include developing expectations from multiple sources to help identify unusual or unexpected relationships (Borthick et al., 2006). Auditors have adopted the process auditing approach, which relies on increased analysis of business strategy, risk, control testing and make capability of auditing to manage effectively and reduced audit hours in audit planning, conducting the audit and reporting on the audit finding (Wright and Wright, 2000; Girard and Farmer, 1999; Bae and Ashcroft, 2004). The prior audit expertise research has shown that domain- specific knowledge and expertise, determined by the nature of auditors' experience. The finding suggest that in complex AIS setting such as ERP Systems , higher level of auditors AIS knowledge and expertise can improve the quality of their risk assessments, and in turn, the effectiveness of their substantive planning decisions (Bonner et al.,1990 ,Hunton et al., 2002). Therefore, posit the hypothesis as below:

H3: The greater the Accounting Information System Knowledge is, the more likely that the auditors will achieve Quality of Auditor Planning Judgments.

2.3 Consequences of Accounting Information System Knowledge and Audit Effectiveness. 2.3.1 Risk Assessment Competency and Audit Effectiveness

In Accounting Information System environments, the computerized assisted auditing has tools and techniques where auditors use to automate or simplify the audit process and use to facilitate tests of detail of transactions, account balances and disclosures provide comfort that the integrity of data sounds and there are controls over that data. The implementation of new technology such as using computerized assisted within the auditing environment was expected to be helpful and enhance the quality of information available in decision making. The relationship between Information Technology (IT) and audit process identified significant changes in every phase of audit process as new technological trend emerged (Bierstaker et al., 2001). Improvements in the closing process enable more and higher quality analyses, improvements in the accuracy and quality of financial reports, and create the potential to generate earlier earnings announcements, audit reports. The computer systems provide more real-time data and report and provided general benefits in terms of increased transaction processing efficiency, more accessible information of a higher quality and greater support for adhoc reporting (Granlund and Malmi , 2002; Spathis and Constantinides, 2003). Therefore, posit the hypotheses as below:

H4: The greater the Risk Assessment Competency is, the more likely that the auditors will achieve Audit Effectiveness.

2.3.2 Quality of Auditor Planning Judgments and Audit Effectiveness

Maletta & Kida (1993) continued this research to investigating the joint effect of inherent risk levels on auditors' source reliabilities judgments, reliance on internal audit to reduce planed audit works. The auditors' source reliability judgments can be quite complex when elements of the risk environment are explicitly considers. The auditors' knowledge has strength of the link between risk factors and planning judgments. Auditor's report expresses the opinion of an independent expert regarding the degree of reliability upon of the information presented in the financial statements. In other words, auditor's report assures the financial statements users, which normally are external parities such as shareholders, investors, creditors and financial institutions, of the reliability of financial statements, which are prepared by the management of the company (Shelton et al., 2001). The planning stages of risk recognition, risk assessments, substantive planning. The findings of the study suggest a positive effect of domain-specific knowledge on the effectiveness of auditors' planning judgments. For example, more experienced auditors incorporated the high complexity and judgmental nature of an accounting system into their planning judgments, while less preference for effectiveness (Bierstaker & Wright, 200).The level of auditor accounting information system knowledge or expertise has significantly influence the auditors' planning judgments in ERP environments (Hunton et al., 2001).The utilization of this heuristic during planning judgments can be dependent on the auditors' level of AIS knowledge (Monroe & NG, 200). Therefore, posit the hypotheses as below:

H5: The greater the Quality of Auditor Planning Judgments is, the more likely that the auditors will achieve Audit Effectiveness.

3. RESEARCH METHODS

3.1 Sample Selection

The sample data for this study comprise CPAs' in Thailand form Federation of Accounting Professionals under the Royal Patronage of His Majesty the King. The sources of data are good sources because research method provides a sampling framework that possibility sampling and it can assume that CPAs' in Thailand are members of Federation of Accounting Professionals under the Royal Patronage of His Majesty the King. The simple random of CPAs' in Thailand from Federation of Accounting Professionals under the Royal Patronage of His Majesty the King was 500 participants who had passed examination subject of the Computerized Auditing. Deducting the undeliverable from the original 500 mailed, the valid mailing was 28 surveys from which 228 responses were received. Of the surveys completed and returned, only 354 were usable. The effective response rate was approximately 48.30 %. According to Aaker, Kumar and Day (2001), the response rate for a mail survey, without an appropriate follow-up procedure, is less than 20%. Thus, the response rate of this study is considered acceptable. Following Armstrong and Overton (1977) tested for differences between early and late respondents and found no significant differences, indicating that non response bias was not a major problem in this study.

3.2 Questionnaire Design and Measurements

3.2.1 Questionnaire Design

The design of the questionnaire of this study is adopted several from sources of data, including previous instruments developed by other researchers and the research framework developed from the relevant literature. Most of the questions were in closed form using a Likert-type scale, all scored on five-point numerical scale from 1=strongly disagree to 5=strongly agree. A half page empty space at the end of the questionnaire is provided to give respondents an opportunity to express anything else that they would like to add. Before using the data collected, the pre-testing was undertaken (Hunt et al., 1982, Presser & Blair, 1994, Babbie, 2005). Pre testing was intended to identify whether there were any ambiguous or unanswerable questions, to identify whether the wording or layout could be adjusted, whether the meaning the researcher believed was associated with a question, and how others perceived it. A draft of the questionnaire was sent to academics at University of Mahasarakham to examine and approve the construct validity. Academics are served as respondents and assist in testing the instrument; comments and suggestions were use to revise the instrument in terms of readability, validity.

3.2.2 Measurements

The study design of the questionnaire is newly developed from several sources of data, including previous instruments developed by other researchers and the research framework developed from the relevant literature. All of the questions are in closed form using a Likert-type scale. All are scored on fivepoint numerical scale from 1=strongly disagree to 5=strongly agree. The measurement analysis emphasizes explanation of the reliability and validity of new instruments for measuring these constructs.

3.2.2.1 Dependent Variables

Audit Effectiveness was measured via six items that the employment of available resources and improve profitability of responsibility and accountability to the professional, increase the value-added service and enhance working reputation of audit service; which meets or exceeds customer expectations regarding features and performance.

3.2.2.2 Independent Variables

Accounting Information System Knowledge was measured using six items to test skill or expertise and knowledge of auditing process about understand and analyze the concentration of controls in an electronic environment; understand information systems and understand the use of computer auditing software.

Risk Assessment Competency was measured using four items to test the capability of gather enough competent evidential matter such that the achieved audit risks are at a level acceptable to the auditor. As technology enables to work different, it provides the opportunity to work more closely with clients, to better work in teams, to eliminate waste and perform audit work more effectively and in less time. The auditors apply the audit risk model during the planning phase of the audit by making judgments concerning client risks and the scope of audit risk.

Quality of Auditor Planning Judgments was measured using four items to test the auditors can apply the technology to helps auditor to comprehensive analytical typically include developing expectations from multiple sources to help identify unusual or unexpected relationships and auditors can adopted the process accounting information system approach, which relies on increased analysis of business strategy, risk, control testing and make capability of auditing to manage effectively and reduced audit hours in audit planning, conducting the audit and reporting on the audit finding.

3.3 Validity and Reliability

An assessment of the reliability of the constructs and the validity of the instrument were conducted to establish the reliability and validity of the instrument.

Reliability; the most common measure of scale reliability is Cronbach's Alpha. Prior to conducting factor analysis on the data, it was considered useful to check the reliability of the scale used to confirm that the scale used consistently reflects the scale they are measuring (Field, 2005).

Validity; to identify any remaining issues the test instruments pre-testing was undertaken (Hunt et al., 1982, Presser & Blair, 1994, Babbie, 2005). Pre testing was intended to identify whether there were any ambiguous or unanswerable questions, to identify whether the wording or layout could be improved, whether the meaning the researcher believed was associated with a question was how others perceived it.

Factor analysis was firstly utilized to investigate the underlying relationships of a large number of items and to determine whether they can be reduced to a smaller set of factors. The factor analyses conducted were done separately on each set of the items representing a particular scale due to limited observations. With respect to the confirmatory factor analysis, this analysis has a high potential to inflate the component loadings. Thus, a higher rule-of-thumb, a cut-off value of 0.40 was adopted (Nunnally and Berstein, 1994). All factor loadings are greater than the 0.40 cut-off and are statistically significant. The reliability of the measurements was evaluated by Cronbach alpha coefficients. In the scale reliability, Cronbach alpha coefficients are greater than 0.70 (Nunnally and Berstein, 1994). The scales of all measures appear to produce internally consistent results; thus, these measures are deemed appropriate for further analysis because they express an accepted validity and reliability in this study. Table 1 shows the results for both factor loadings and Cronbach alpha for multiple-item scales used in this study.

3.4 Statistic Test

This research uses the Ordinary Least Squares (OLS) regression analysis to test the hypotheses and estimate factors affecting audit performance. Because both dependent and independent variables in this study were neither nominal data nor categorical data, OLS is an appropriate method for examining the hypotheses relationships (Aulakh, Kotabe and Teegen, 2000). In this research, the model of aforementioned relationships is as follows:

Equation 1 : AE = [beta].sub.01] + [beta].sub.1] ASK + e

Equation 2 : ASK = [beta].sub.02] + [beta].sub.02]RAC+ [beta].sub.3] QPJ + e

Equation 3 : AE = [beta].sub.03] + [beta].sub.04]RAC+ [beta].sub.5]PJ +e

Where as:

AE = Audit Effectiveness; ASK = Accounting Information System Knowledge;

RAC = Risk Assessment Competency; QPJ = Quality of Auditor Planning Judgments.

4. RESULTS AND DISCUSSION

The descriptive statistics and correlation matrix for all variables are shown in Table 2. The results of OLS regression according to hypotheses are estimated as shown in Tables 3 to 4. Interaction terms induced by Technological Change along with the main effects are included last model.

Table 2 shows the descriptive statistics and correlation matrix for all variables. With respect to potential problems relating to multicollinearity, variance inflation factors (VIF) were used to provide information on the extent to which non-orthogonality among independent variables inflates standard errors. The VIFs range from 1.01 to 2.15, well below the cut-off value of 10 recommended by Neter, Wasserman and Kutner (1985), meaning that the independent variables are not correlated with each other. Therefore, there are no substantial multicollinearity problems encountered in this study.

Table 3 and 4 presents the results of OLS regression of the relationship between the Accounting Information System Knowledge and Audit Effectiveness via the mediating influences of Risk Assessment Competency, and Quality of Auditor Planning Judgments in this research model.

The first set of research hypothesis focused on the relationships between the Accounting Information System Knowledge and Audit Effectiveness (Hypothesis 1) are shown in Table 3. The findings indicate that the Accounting Information System Knowledge ([H.sub.1]: [b.sub.1] =0.68, p < 0.01) has a positive and significant effect on Audit Effectiveness. Therefore, Hypothesis 1 is supported.

The second set of the hypotheses concentrated on the relationships between the Accounting Information System Knowledge and the Risk Assessment Competency (Hypothesis 2) in Table 3. The evidence indicates that the Accounting Information System Knowledge (H2: [b.sub.2] = 0.76, p < 0.01) has a positive and significant effect. Therefore, Hypothesis 2 is supported.

The relationships between the Accounting Information System Knowledge and the Quality of Auditor Planning Judgments (Hypothesis 3) are shown in Table 3. The evidence indicates that the Accounting Information System Knowledge (H3: [b.sub.3] = 0.68, p < 0.01) has a positive and significant effect. Therefore, Hypothesis 3 is supported.

The third set of research hypotheses states that the Risk Assessment Competency and Quality of Auditor Planning Judgments is expected to positively drive the Audit Effectiveness (Hypotheses 4-5) in Table 3. The evidence indicates that the Accounting Information System Knowledge (H4: [b.sub.3] = 0.74, p < 0.01) has a positive and significant effect. Accounting Information System Knowledge has a strong influence on Risk Assessment Competency. Therefore, Hypotheses 4 is supported.

The evidence indicates that the Accounting Information System Knowledge (H5: [b.sub.3] = 0.76, p < 0.01) has a positive and significant effect. Accounting Information System Knowledge has a strong influence on Quality of Auditor Planning Judgments. Therefore, Hypotheses 5 is supported.

5. CONTRIBUTIONS

5.1 Theoretical Contributions

The research contributes to the extension of contingency theory to another specialized domain; the external audit domain in Thailand. There have been a limited number of studies that extend the basic theory proposed for wider IT adoption/implementation domains, but none have yet examined the external audit community. This contributes to further explanation of the impact of certain attributes of knowledge, experience; skills and expertise user are using the Accounting Information System by CPAs in Thailand.

5.2 Practical Implications

The model of Accounting Information System Knowledge by CPAs in Thailand presented in this study could be used as a guide for implementing of information technology not only by external auditors but also by other operating. Auditors can developing greater understanding of the innovation of auditing potential may be to look again into the computerized assisted auditing training for auditors as part of the professional development pre and post qualification, greater emphasis on specialized qualifications in these areas and improved working relationships' with software providers, to continue the process of developments of the computerized assisted auditing usefulness and effectiveness practice. The research, could give implications for greater regulatory enforcing of the computerized assisted auditing usage for external auditors. Even though existing standard by the IIA, IAASB and ISACA provide recommendations and guidance on the use of the information technology, the decision to use information technology in practice is subject to the prerogative of the auditors. However, Information Technology usages remains low in general, and regulators may need to take the view that a strong recommdation, more direct regulatory intervention in adaption/implemention decisions, is going to be necessary to ensure auditors developing wider use of the technology of auditing, and has other regulatory action to push forward these tools as best practice illustrations which be helpful in auditing process.

Regarding the first research question stated, we conclude that financial and internal auditors are acquiring AIS knowledge and competences needed to perform their mission in a professional manner in a differentiated way. Financial auditors gain such knowledge by attending AIS courses organized by their professional organizations, while internal auditors by attending such courses on their own initiative.

6. CONCLUSION

In this research, a framework the impact of the Accounting Information System Knowledge and Audit Effectiveness. The study attempts to find out if there was change in audit process as a result of the effectiveness of implementing of auditing technology. The model was tested using data collected from CPAs in Thailand. The results support of the hypotheses and reveal that the Accounting Information System Knowledge is critical for the Audit Effectiveness as shown in Table 3. The Accounting Information System Knowledge is positively related to Audit Effectiveness via the mediating influences of the Risk Assessment Competency, and Quality of Auditor Planning Judgments which confirms the findings of this research. Hence, the factors in this research model can be used as on guidance when discussing issues on the implementing of auditing technology.

7. LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH

This study emphasizes the importance of the Accounting Information System Knowledge links Audit Effectiveness, but it does not address the issue of how the Accounting Information System Knowledge should be carried out. This research has some limitations. First, this study emphasizes the importance of Accounting Information System Knowledge and Audit Effectiveness. Future research could identify the antecedents of the Accounting Information System Knowledge. Secondly, used detailed field-based studies, longitudinal case studies, and case surveys and to test different audit environmental influences to each of the factors identified in the model in these difference contexts.

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Aukkaradej Chaveerug, Mahasarakham University, Thailand

Dr. Aukkaradej Chaveerug earned his Ph.D. (Accounting) at Faculty of Accountancy and Management, Mahasarakham University, Thailand in 2009. Currently he is a Lecturer of Accounting Major at the Faculty of Accountancy and Management, Mahasarakham University, Thailand
TABLE 1
RESULTS OF MEASURE VALIDATION

Items                                       Factor     Cronbach
                                           Loadings     Alpha

Audit Effectiveness                       0.94-0.96      0.94
Accounting Information System Knowledge   0.84-0.92      0.91
Risk Assessment Competency                0.81-0.84      0.83
Quality of Auditor Planning Judgments     0.88-0.90      0.88

TABLE 2
DESCRIPTRIVE STATISTICS AND CORELATION MATRIX

Variables                          AE        ASK        RAC     QPI

Mean                              3.91       3.84      3.82     3.78
Audit Effectiveness
Accounting Information System   0.66 **
  Knowledge
Risk Assessment Competency      0.74 **    0.72 **
Quality of Auditor Planning     0.76 **    0.76 **    0.74 **
  Judgments

* p<.05, ** p<.01

TABLE 3
RESULTS OF OLS REGRESSION ANALYSIS (a)

Independent variables                           Dependent Variable

                                 AE        RAC       QPJ        AE

Accounting Information        0.68 ***   0.76 **   0.68 **
  System Knowledge (ASK)
                              (0.09)     (0.05)    (0.02)
Risk Assessment Competency                                   0.74 **
  (RAC)
                                                              (0.07)
Quality of Auditor Planning                                  0.76 ***
  Judgments (QPJ)
                                                              (0.07)
Adjusted [R.sup.2]              0.66      0.72      0.66       0.72

*** p<.01, (a) Beta coefficients with standard
errors in parenthesis.

AE = Audit Effectiveness; ASK = Accounting
Information System Knowledge;

RAC = Risk Assessment Competency; QPJ = Quality
of Auditor Planning Judgments.
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