| In this study a conceptual framework for audit communication research is developed, and empirically tested. The framework includes four concepts (symmetry, schema-incongruity, vividness, and audit risk), and is tested under two different reporting scenarios; one built around audit reports concerning presentation of financial statements of a hypothetical enterprise, the other involves an auditor's report on the internal control structure of another hypothetical enterprise. Within each scenario, three different sets of reporting language were manipulated to elicit subjects' responses. Subjects were asked to respond to fourteen case questions regarding scenario one and eleven case questions for scenario two.; The field experiments were conducted with 122 audit partners and managers, and 123 professionals from the banking and investment communities. A between-subjects design was used with three levels of reporting language in each scenario as the independent variables and composite scales based on subjects' responses as the dependent variables.; Scales for cognitive dimensions of "goodness," "risk," and "accommodation" were developed and tested for their psychometric properties using Cronbach's coefficient alpha and factor analysis. The means of the scaled values for each of the cognitive dimension were used in the subsequent analysis of variance and t-tests.; The results generally support the conceptual framework proposed. Users' evaluation of "goodness" or "understandability" of audit communication with a vivid structure is favorable, and "goodness" is inversely related to the cognitive dimension of "accommodation." A process of successful "accommodation" may explain why, in some situations, the users' final decision (e.g., fixing interest rate) may not vary with the "goodness" of an audit report.; Auditors' evaluation of "goodness" of an audit communication with a vivid structure is unfavorable as it is inconsistent with their frame of reference (such as, professional reporting standards). Auditors' assessment of "risk" associated with a vivid audit communication is relatively high compared to the auditor's standard report, and is inversely related to "goodness" of audit communication.; The study shows how the framework can be applied to investigate other effects, e.g., source credibility. Finally, a set of propositions for future research is presented. |
