023 0535 0005 0175 0049 0001 0002 0286 0000 0244 0025

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Unformatted text preview: UE *PUBLIC 5 6 3 *TENURE *INDUSTRY 4 *PYERR e (1) Test of H2p: PERSUASIVENESS 1 *MI 5 0 *PYERR 2 *RMM 3 *REVENUE *PUBLIC *TENURE 4 *INDUSTRY 6 7 e (2) Test of H2t: TIMING 0 *MI *RMM 1 2 *PYERR 5 6 *REVENUE 3 *PUBLIC 7 *TENURE 4 *INDUSTRY e (3) Test of H2e: EXTENT 0 *MI *RMM 1 2 5*PYERR Independent Variables and Expected Signs RMM (H1) Intercept 1.974 0.002 0.034 0.357 MI RMM REVENUE ? TENURE PYERR PUBLIC INDUSTRY Adjusted R2 ? *REVENUE 3 6*PUBLIC 0.045 0.250 0.012 0.204 1.700 0.001 0.123 0.257 0.224 0.082 79.51% *TENURE 4 7*INDUSTRY e (4) Dependent Variables PERSUASIVENESS TIMING (H2p) (H2t) 1.063 0.001 0.092 0.019 0.136 0.018 0.023 0.207 0.008 0.112 0.271 0.021 0.054 0.255 0.018 0.766 66.39% 118.650 0.001 1.154 0.252 3.153 0.111 2.136 0.005 1.044 0.001 7.827 0.070 1.165 0.370 0.543 0.823 71.06% EXTENT (H2e) 0.023 0.535 0.005 0.175 0.049 0.001 0.002 0.286 0.000 0.244 0.025 0.053 0.016 0.061 0.008 0.233 70.74% Risk of material misstatement (RMM) is a scale from 1–5 where 1 is low risk and 5 is high risk. PERSUASIVENESS is the average independence score given to audit procedures in the revenue cycle where the independence score is on a three-level scale: 3 for outside information, 2 for outside / inside information, and 1 for inside information. TIMING is the percentage of audit testing conducted at the end of the fiscal year. EXTENT is the total hours spent performing test of controls and substantive testing in the revenue cycle divided by total audit hours. MI is the auditor’s assessment of management’s integrity measured on a three-level categorical scale of 2, 1, or 0, where 2 represents high levels of integrity. Control variables include natural log of revenue (REVENUE), years as auditor (TENURE), prior year, revenue cycle, audit differences (PYERR), public or private ownership (PUBLIC), and industry (INDUSTRY). Statistical significance for parameter estimates (p-values) are for one-tailed tests with directional expectations and two-tailed tests where there is no directional expectation. The Impact of Man...
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This note was uploaded on 11/11/2010 for the course MIS BMBM31101 taught by Professor Ms.sara during the Spring '10 term at Asian Institute of Management.

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