Expectation of Errors in Unaudited Book Values: The Effect of Control Procedures and Financial Condition.

Key Points

• This research aims to explore how control procedures and the financial condition influence auditors' assessments of expected account balances.
• Investigated the interactions between financial condition and control procedures on auditors' judgments.
• Analyzed the sensitivity of auditors' error judgments to clients' control systems.
• Evaluated the risk of account manipulation during periods of varied financial performance.
• Auditors' expected values are influenced by the strength of clients' control procedures.
• Weak control procedures correlate with higher perceived risk for account manipulation.
• Financial condition significantly alters auditors' error judgment perceptions.