An Empirical Study of Belief-Based and Probability-Based Specifications of Audit Risk.

Key Points

• The study aims to evaluate how belief-based specifications of audit risk improve risk assessment by including qualitative evidence.
• Derivation of auditors' allowed test of details risk was performed to assess risk specifications.
• Comparison between belief-based and probability-based audit risk models was analyzed.
• The belief-based model captures additional dimensions of evidence beyond mere probability estimates.
• Improvements in risk assessment were observed, enhancing understanding of audit risks.