Abstract The evaluation of Internal Control Systems has been considered mainly as a single-stage process in the current literature. This paper at- tempts to reconcile some apparently discrepant research findings Gaunmitz et al., 1982; Joyce, 1976 by dividing the process into three different stages: 1) identification, 2) evaluation, and 3) interpretation. The final stage, where auditors restrict substantive tests based on their perception of internal control strength, was analyzed in descriptive terms. A high degree of consensus was found in the substantive test planning decisions when the system reliability numbers were provided, Meanwhile, large divergence was observed when only component reliability numbers were provided. Therefore, the experimental results indicate that auditors will disagree on how to aggregate audit evidence, but once one aggregation rule is established, high consensus will follow. These findings reconcile the above-mentioned, previously discrepant findings and lend credibility to the need and desirability of using internal control reliability decision aids. To shed further light on this judgment process, a descriptive mathematical model is also developed and tested, with encouraging results for further research.
Srinidhi et al. (1986) studied this question.