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
Publisher
Sage Publications, Inc.
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
Language
English
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