Shelton (1999) found that experience, based on rank, mitigates the influence of less-than diagnostic evidence in going concern assessments. But, numerous studies (e.g., Abdolmohammadi and Wright 1987) question the external validity of studies that use rank to determine experience. I suspect that specialized domain experience is a better measure because all auditor ranks do not have procedural knowledge in going concern decisions but many auditors may have procedural knowledge in audit planning (AICPA 2008) and automated controls (Hunton et al. 2004). I investigate whether external financial statement auditors (henceforth auditors) sufficiently adjust their audit plans for material-automated-control-weaknesses. I determine the sufficiency of auditors’ audit plan adjustments by comparing their adjustments for material-automated-control weaknesses to professionals with specialized domain experience in automated-controls, IT audit specialists. Auditors’ audit plan adjustments are significantly lower than IT audit specialist when less-than-diagnostic evidence is present. Thus, specialized domain experience mitigates the influence of less-than-diagnostic evidence. Meanwhile, experience based on rank, does not mitigate the influence of less-than-diagnostic evidence. The implication of my study is that consulting with IT audit specialists while revising plans for material-automated-control weaknesses may improve the likelihood that adequate resources will be allocated to address automated-control weaknesses and reduce the likelihood of audit failure.

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Copyright © 2012 Jordan Whitney Enterprises, Inc.. This article first appeared in Academy of Accounting and Financial Studies Journal 16, no. 2 (March 2012): 1-24.

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