Murdoch University Research Repository

Welcome to the Murdoch University Research Repository

The Murdoch University Research Repository is an open access digital collection of research
created by Murdoch University staff, researchers and postgraduate students.

Learn more

Structure versus judgement in the audit process: a test of Kinney’s classification

Smith, M., Fiedler, B., Brown, B. and Kestel, J-A (2001) Structure versus judgement in the audit process: a test of Kinney’s classification. Managerial Auditing Journal, 16 (1). pp. 40-49.

Link to Published Version:
*Subscription may be required


Sullivan suggests that the alternative audit approaches adopted by accounting firms be expressed in terms of “structure” and “judgement”, with a division provided by the degree to which auditor judgement is replaced by structured quantitative algorithms. Cushing and Loebbecke attempt to operationalise this division by examining the guidance provided to practising auditors by their firms. Kinne extends this study by classifying accounting firms as “structured”, “intermediate” or “unstructured” in terms of their audit methodologies. Provides a test of Kinney's classification by examining the tolerance of accounting firms to accounting policy choices which have an income effect in their clients’ financial statements. Argues that those firms with a structured audit approach will manage audit risk through a greater reliance on mechanistic procedures, resulting in a greater tolerance of income manipulation. The results are confirmatory for the period under study, but evidence is provided to suggest that audit firms have subsequently become less diversified in their approach.

Item Type: Journal Article
Murdoch Affiliation(s): Murdoch Business School
Publisher: Emerald Group Publishing Limited
Copyright: © 2001, MCB UP Limited
Item Control Page Item Control Page