THE EFFECTS OF EXPERIENCE AND FEEDBACK ON DETERMINANTS OF AUDIT EXPERTISE: AN EXPERIMENTAL INVESTIGATION OF THE ACQUISITION OF TACIT MANAGERIAL KNOWLEDGE (JUDGMENT PERFORMANCE)

In psychology and auditing, researchers have found that tacit knowledge (i.e., practical knowledge that is unverbalizable and generally untaught) is related to the level of professional advancement (e.g., Wagner and Sternberg 1985; Wagner 1987) and that superior performance at the managerial level in a public accounting firm is dependent on the level of tacit managerial knowledge possessed (Tan and Libby 1997). The results of these studies imply that this "softer" type of knowledge (i.e., tacit managerial knowledge) that is generally untaught and unverbalizable is a potential determinant of audit expertise in addition to the technical accounting knowledge that has been the focus of audit judgment research to date.; The purpose of this dissertation is to extend the line of research on knowledge-based effects on judgment performance by addressing the following research questions: Can tacit knowledge which is necessary for expert performance in auditing be acquired in a laboratory environment (therefore implying that tacit knowledge can be formally taught), and does the acquisition of tacit knowledge have a positive effect on judgment performance?.; An experimental research design was used to test the following relationships: (1) the effects of experience (technical vs. non-technical) and feedback (cognitive vs. no feedback) on the acquisition of tacit managerial knowledge, (2) the effects of experience and feedback on judgment performance, and (3) the effects of problem-solving ability on knowledge acquisition and judgment performance. Tacit managerial knowledge was measured using an adapted version of an instrument developed by researchers in psychology (e.g., Wagner 1985, 1987) and auditing (Libby and Tan 1997) while performance was measured using an in-basket exercise (Frederiksen, Saunders, and Wand 1957).; The overall results of the experiment suggested that the type of experience and feedback had no effect on the acquisition of tacit managerial knowledge and judgment performance and that problem-solving ability was generally related to knowledge acquisition and performance. In addition, verbal ability was found to be unrelated to the amount of knowledge acquired or performance on the in-basket exercise. This dissertation concludes by discussing the results of the experiment as well as limitations and directions for future research.