ABSTRACT: This paper argues that opportunities for auditors to gain industry-specific knowledge differ across industry settings. This knowledge is of particular benefit when identifying business risks, information sources, evidence-gathering processes and accounts and related assertions. Two groups of auditors, who specialize in very different industries, are compared. One group specializes in a complex industry, which affords them the opportunity to gain relatively more industry specific knowledge than the other group, which specializes in a less complex (generic) industry. Comparing auditor responses with the answers given by expert panels, we find that auditors working in a complex industry have a greater comparative ability to identify business risks, information sources, and evidence-gathering processes in their industry than auditors working in a generic industry.
