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Research studies on the information content of audit opinions have produced conflicting results. One possible reason could be that these studies did not incorporate investors′ prior expectations of the audit opinions which would be issued. Attempts to model investors′ prior expectations have, however, focused on the development of audit opinion prediction models using mainly financial variables. This study attempts to empirically determine the sources of information which investors would use in forming expectations of audit opinions prior to their issuance. The results indicate that some non‐financial variables which have been largely ignored by other models play an important role in the formation of investors′ expectations, while the converse is true for some financial variables which have been used in earlier models. Further, respondents in the study with different working backgrounds differed significantly in their mean ratings of importance on certain variables. Comparatively, non‐accounting/non‐finance respondents had a tendency to favour financial variables while accounting/finance respondents favoured non‐financial variables.

Examines the impact of client industry on the use and effectiveness of audit analytical procedures. Segregates audit client firms into two industry categories ‐ new and matured. Posits that the industry category the client firm is operating in will have a substantial effect on the extensiveness, types and effectiveness of analytical procedures employed. In particular, hypothesizes that analytical procedures will be more extensively and effectively used in the audit of firms in matured industries. Further, hypothesizes that trend analysis will be used primarily in the audit of firms in matured industries while visual scanning of data and ratio analyses will be used in the audit of firms in both new and matured industries. The results of a questionnaire survey distributed to one of the Big Six audit firms in Singapore support the above hypotheses.