Audit Task Complexity

A model is ~ for examining the dfects off audit task complexity on audit judgment performance. model ~ developed from a review ¢ff literatmes ht accounting, ~ t , and psydmlogy. Seven testable ptoix~ttons are derived. Using the model, previous audit judgment research on ratio analysis and goingommern evahmtom is reauslyzed to examine the relation between task complexity and judgment performance, while controlling for the possible tateractive effects of skin. For these tas~ increases in (task com#~ty/stdll) are related to decreases in judgment performance. However, for fl~e ratio analysts task, this remion is driven ~ by selL Understanding audit task complexi ty and its effects on judgment per formance is important for several reasons. First, previous research has shown that seemingly minor task characteristics, such as wording of instructions, can affect judgments (Libby, 1981 ). A critical task characteristic like complexi ty could have a major impact on audit judgments, especially since many audit tasks are highly complex (Libby, 1985). Second, some research has suggested that tasks of differing complexi ty require different types of decision aids or training (Abdoimohammadi , 1987; Fleishman, 1975; Keen & Scott.Morton, 1978); understanding levels of complexi ty of various audit tasks assists researchers in understanding current uses of decision aids and training as well as recommending changes for tasks where current judgment per formance might be hindered. Also, if skill (knowledge and abilities) is more important in complex tasks, the identification of complex tasks could be important in explaining or recommending job assignments (Abdolmohammadi , 1987; Libby, 1992). Thus, task complexi ty deserves more at tention as it could affect the interpretability of research results as well as auditors' actual per formance of audit judgment tasks. The purpose of this paper is to develop a model that auditing researchers may employ in pursuing research on the effects of audit task complexi ty on auditors ' judgment. A large body of l i t e ra tu re in psychology, management , and o ther social sciences has demonstra ted wide-ranging effects of task complexity on judgments. Even though this literature is fairly extensive, it remains disjointed, partially due to the lack of a comprehens ive definition or theory of task complexi ty and its effects. In general, increases in task complexi ty are thought to decrease judgment quality, but our understanding of why and h o w this occurs is still in the developmental stages. These shortcomings in the literature may explain the paucity o f w o r k on the effects o f task complexi ty in auditing. Research which directly examines the effects of audit task complexi ty on auditors' judgments has been minimal; instead, task complexi ty has played a subsidiary role in the audit judgments research. First, task complexi ty has been used * I wou ld like to thank Alt Abdulmohammadi , Robert Libby, Joan Luft, Mark Nelson, Mark Y o u n g and two anonymous reviewers for their helpful comments .