Abstract The American Institute of Certified Public Accountants' (AICPA) release of a Statement of Auditing Standards on audit planning AICPA, 1984, AU 311 and creation of quality control standards AICPA, 1984, QC 100 suggests that the accounting profession recognizes the great importance of audit planning. Such pronouncements require auditors to consider various environmental factors in audit planning. This paper provides evidence on whether environmental information and internal control effectiveness significantly influence audit plans. In addition, this paper examines whether requiring subjects to make an explicit evaluation of internal control has an effect on planned audit hours. The results indicate a) a significant interaction effect between environmental factors and internal control strength, and b) a significant interaction effect between explicit evaluation of internal control and internal control strength.
Steven E. Kaplan (Sun,) studied this question.