DISCUSSION OF Aggregation of Evidence in Auditing: A Likelihood Perspective.

Abstract This article focuses on aggregation of evidence in auditing. in the old days when auditors were confronted with significant risk, they dealt with it by simply spending more audit hours on the problem. Audit organizations had a pyramid-like structure with a wide base, and costs were relatively low. Thus, the strategy was easy to execute and remained effective as long as there was adequate management. Since management level costs were a relatively small portion of total costs, this usually was not a barrier. At present, however, significant changes have occurred. Costs have increased firms have grown and adopted very competitive strategies in order to sustain their size and growth orientation, professional ethical restraints have been changed to encourage competition, and client managements have become more sensitive to costs and more aware as buyers. A major impact of this has been a reengineering of the audit process to be both more efficient and more effective. The primary components of this effort are increased planning with a focus on analysis and assessment of risk.