Bayesian and Belief-Functions Formulas for Auditor Independence Risk Assessment
Issue Date
2009Author
Srivastava, Rajendra P.
Mock, Theodore J.
Turner, Jerry L.
Publisher
Wiley
Type
Article
Article Version
Scholarly/refereed, author accepted manuscript
Published Version
http://onlinelibrary.wiley.com/journal/10.1111/%28ISSN%291099-1123Metadata
Show full item recordAbstract
This paper illustrates two formulas for assessing independence risk based on the Bayesian and belief-functions
frameworks. These formulas can be used to assess the role of threats to auditor independence as well as the role
of threat-mitigating safeguards. Also, these formulas provide a basis for evaluation of an audit firm’s independence
risk and a framework to educate stakeholders about the threats faced by the audit firm and the role of effective
safeguards in mitigating these risks. The formulas also provide a means for regulators and lawmakers to evaluate
whether they have effective safeguards in place given the existence of threats and for auditors to signal to various
stakeholders that they have identified significant threats and have effective safeguards in place. To show the
potential usefulness of these analytical models, several illustrations addressing increased transparency and the
potential impact of regulations are presented.
Description
This is the authors final draft. The publisher's official version is available electronically from: <http://onlinelibrary.wiley.com/journal/10.1111/%28ISSN%291099-1123>.
Collections
Citation
Srivastava, Rajendra. (2009) Bayesian and Belief Functions Formulas for Auditor Independence
Risk Assessment. International Journal of Auditing, 3, 163-183.
Items in KU ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.
We want to hear from you! Please share your stories about how Open Access to this item benefits YOU.