Title

Audit scheduling and the control of travel costs using an optimization model for multinational and multinational audits

Document Type

Journal article

Source Publication

Journal of Accounting, Auditing and Finance

Publication Date

1-1-1998

Volume

13

Issue

1

First Page

67

Last Page

98

Abstract

Auditor travel can significantly complicate the scheduling process and have an important impact on audit cost, especially for audits of multinational companies. This paper formulates an optimization model that specifically incorporates auditor travel time and costs in the determination of the overall optimal audit schedule. From a more theoretical perspective, this research extends the method of cost control by proposing a method by which a sequence-dependent setup cost (i.e., travel cost) and an associated variable cost (i.e., out-of-town cost) can be programmed into an optimization process for audit planning. The proposed model provides an optimal schedule considering such costs in a multiple nonidentical manpower (i.e., different auditors) environment. Previous research on manpower scheduling has not dealt with sequence-dependent travel costs. The out-of-town time and cost elements are unique for manpower scheduling and not applicable for machine scheduling. An implementation of the model to an actual empirical audit is presented.

Print ISSN

0148558X

E-ISSN

21604061

Publisher Statement

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Full-text Version

Publisher’s Version

Recommended Citation

Chan, K. H., Lam, S. F., & Cheng, S. (1998). Audit scheduling and the control of travel costs using an optimization model for multinational and multinational audits. Journal of Accounting, Auditing & Finance, 13(1), 67-98. Retrieved from http://jaf.sagepub.com/content/13/1/67.abstract