HABEGGER, JERRELL WAYNE; PHD

                         BUSINESS ADMINISTRATION, ACCOUNTING (0272)

                         In planning an effective and efficient audit examination, the auditor has to choose appropriate auditing
                         technologies and procedures. This audit choice problem has been explored from several perspectives.
                         However, it has not been viewed as an innovation process. This dissertation reports the results of an
                         innovation decision study in internal auditing. Hypotheses of associations between the internal auditor's
                         decision to use statistical sampling and the perceived characteristics of statistical sampling are derived for
                         Rogers' Innovation Diffusion model (Everett Rogers, Diffusion of Innovations, 1983). Additional
                         hypotheses relating the decision to use statistical sampling to personal and organizational characteristics
                         are derived from the innovation adoption and implementation research literature. Data for this study were
                         gathered by mailing a questionnaire to a sample of internal audit directors. Incorporated into the
                         questionnaire are several scales for measuring (1) innovation attributes, (2) professionalism, (3)
                         professional and organizational commitment, (4) management support for innovation, and (5) creativity
                         decision style. The useable response rate was 32.5% (n = 260). The primary finding of this study is that
                         the extent of use of attributes, dollar unit, and variables sampling techniques is positively associated with
                         the respondents' perceptions of their relative advantage, trialability, compatibility and observability, and
                         negatively associated with the techniques' perceived complexity. A secondary finding is that there is no
                         overall association between the extent of use of statistical sampling by the internal auditors and their (1)
                         professionalism, (2) professional and organizational commitment, (3) decision style, and (4)
                         organizational support for innovation. Further exploration using multiple regression and logistic
                         regression analyses indicate that several of the personal and organizational characteristics add to the
                         ability of the regression models to explain the extent of use of statistical sampling. Evidence that
                         organization types do have an effect upon the innovation decision process is presented. The study
                         concludes by discussing its implications for understanding the innovation decision process of internal
                         auditors, for designing and managing future innovation processes in auditing, and for further research
                         into audit choice problems and innovation decisions of auditors and accountants.

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