Use of forward versus backward reasoning during audit analytical procedures: evidence from a computerised-process-tracing field study

Audit judgement research has widely assumed that auditors rely primarily on backward reasoning during analytical procedures but the relative use of forward reasoning has not been directly examined. The present study explains how auditors use backward and forward reasoning during analytical procedures, discusses evidence from other research suggesting that forward reasoning could be more prevalent, and examines the relative use of forward reasoning during analytical procedures with data from a computerised process-tracing field study. Results suggest that auditors rely extensively on forward reasoning when using analytical procedures. Findings motivate future research that examines when forward and backward reasoning are most effective. Copyright 2004 Accounting and Finance Association of Australia and New Zealand.