4.

Results
4.1 Descriptive statistics
First, to address RQ1, we focus on descriptive statistics. Table III contains descriptive
statistics, tests of mean differences, and variability differences for the dependent
variable (PLANHOURS), the nine client risk items (independent variables), and the
client size control variables (ASSETS and REVENUES) for each Australian and
Japanese client sample, as used in equation (2). Table IV contains descriptive statistics
for the same variables reported in Table III for the pooled sample of Australian and
Japanese clients, as used in equation (3). Noteworthy results include the following.
For PLANHOURS, the spread of the range and the standard deviations indicate a
wide variation in the planning of audit engagements within the sample client portfolios
of both the Australian and Japanese audit organizations. These results are consistent
with prior related studies using different datasets than those used by this study (Mock
and Wright, 1993, 1999). However, a test of difference in the mean values of
PLANHOURS for the Australian and Japanese samples shows that they are not
significantly different (i.e. 895 versus 994: p 0.535). In summary, on average while
planned auditor effort varies across audit engagements within each context, it appears
to vary to a much lesser extent across audit firms in different contexts, which does not
support an affirmative response to RQ1.
For the client risk assessments, the spread of the range and the standard deviations
indicate that they vary widely within and between the Australian and Japanese sample
clients, which is also consistent with prior related studies. Tests of mean differences
show that the means of the client risk variables are all significantly different ( p , 0.10)
except for GENCON, MANTRN, and CHGSECIND. Tests of variability differences
show that all the variances are significantly different ( p , 0.10) except for KNOWand
ATTIT. In summary, overall the auditors client risk assessments vary across contexts
and across audit engagements within each context. These differences in the mean and
variability of the client risk variables provide affirmative evidence to RQ1.
Table V contains Spearman and Pearson correlation coefficients and significance
levels (two-tailed) among the variables for the Australian sample (panel A), the
Japanese sample (panel B) and the pooled sample (panel C). LNPLANHOURS
significantly correlates with only a few client risk variables. For the Australian sample,
no significant correlation appears between LNPLANHOURS and the client risk
variables, while for the Japanese sample, it significantly correlates with CHGINF and
PROFIT. For the Japanese sample, the client size variables (ASSETS and
REVENUES) are significantly correlated with many client risk variables (KNOW,
CHGINF, GENCON, PROFIT, and CHGSECIND). However, for the Australian sample,
ASSETS and REVENUES are significantly correlated only with PROFIT. For the
pooled sample, the correlations between ASSETS and REVENUES are strongly