| The motivation for undertaking this study was to understand how auditor evaluate evidence provided by specialists such as lawyers, actuaries, appraisers, geologists, and engineers. Auditors utilize the services of such specialists to evaluate evidence about matters that are beyond the auditors' field of expertise. Since the auditors lack the technical expertise of the specialists, the auditors cannot evaluate the evidence directly; instead, the auditors must evaluate the evidence indirectly by considering the credibility of the specialist providing the evidence.; Two experiments were conducted to investigate the auditors' ability to evaluate information provided by potentially biased sources. The purpose of the first experiment was to examine the factors that influence source credibility. Prior research in psychology and auditing suggested that source credibility is affected by a source's bias and a source's expertise. Auditors' sensitivity to an attorney's bias and expertise was investigated in the first experiment by using the lens model paradigm. The results of the first experiment indicated that the auditors are sensitive to an attorney's bias and expertise.; The second experiment utilized the cascaded inference framework to investigate the auditors' ability to evaluate information from potentially biased sources. The cascaded inference theory provided us with a formal framework for considering the impact of source credibility on evidence evaluation. A normative model based on cascaded inference theory was developed and empirically tested to investigate the effects of source bias and expertise. This model differs from previous models in two ways. First, this model examined the effects of source bias, not just source reliability; that is, we did not assume symmetric reliability. Second, this model considers evidence from two sources providing contradictory reports; previous studies in auditing have considered only a single source.; The results of the second experiment suggest that although the subjects are sensitive to a source's expertise and bias, the subjects do not behave in a normatively appropriate way. In other words, the subjects generally revised their opinions in the appropriate direction, but the revisions were not of the magnitude required by the cascaded inference model. |
