Narratives versus Diagrams: the Impact of Alternative Business Process Representations on Auditor Risk and Control Assessments

Acknowledgements: We gratefully acknowledge the funding provided by the University of Waterloo's Centre for Information Systems Assurance. We are grateful to Scott Paquette and Gary Baker for help in administering the experiment. 2 ABSTRACT This study investigates the effectiveness of alternative methods for documenting business processes for the purpose of performing an assessment of risks and controls. We consider the effects of informationally equivalent textual versus diagrammatic representations of the same business process. Our subjects were 144 higher level accounting undergraduate students in an AIS course. Each was provided either a diagrammatic or textual representation of the business process. The task was a control risk assessment consisting of responding to 24 multiple choice questions based on Borthick, Schneider, and Vance (2010). We also considered the effects of academic ability and self-efficacy in our analysis and whether there is an interaction between presentation format and these factors. The results indicate that there was no difference in either accuracy or time in performing control risk assessments as a function of the presentation mode for the business process: textual or diagrammatic. This result supporting the null hypothesis is found despite significant test power. Further, the effect of representation on performance is not moderated by either academic ability or individual self-efficacy. This study indicates that textual representation of a business process can lead to the same outcome as a diagrammatic representation. This further suggests that curriculum design could profitably incorporate instruction in preparation and use of business process textual narratives in addition to or in place of diagrammatic business process representations. Also, business process assessment practices in industry and the accounting profession could realize some of the benefits that are often attributed to diagrams – accuracy and efficiency – by using textual representations.