（2005）The level of assurance precision and associated cost demanded when providing continuous online assurance in an environment open to assurance competition.pdfVIP

International Journal of Accounting Information Systems 6 (2005) 129– 156 The level of assurance precision and associated cost demanded when providing continuous online assurance in an environment open to assurance competition Ronald J. Daiglea,*, James C. Lampeb,1 a3101 CEBA Building, Department of Accounting College of Business Administration Louisiana State University, Baton Rouge, LA 70803, United States bArea of Accounting, College of Business Administration, Texas Tech University Lubbock, TX 79409-2101, United States Received 1 October 2003; received in revised form 1 April 2004; accepted 1 May 2004 Abstract This study uses experimental market and laboratory experiment methodologies to consider the impact of COA precision and associated cost on its demand over extended multi-period timeframes in repetitive decision-making environments open to competition. Results show that more precise COA is demanded both more in amount and consistency over time, including when priced at a slight premium. More precise COA demand is also highly sensitive to pricing and declines dramatically when its price is increased slightly. Discounted less precise COA demand is not sensitive to premium-pricing of higher quality COA. Exit responses validate the experimental behavior captured. Results indicate that COA should be developed as a higher quality service to internal decision- makers, especially considering specific requirements of the Sarbanes–Oxley Act of 2002. High quality COA providers should be aware that premium pricing substantially above that of competing * Corresponding author. Tel.: +1 225 578 6275; fax: +1 225 578 6201. E-mail addresses: rjdaigle@ (R.J. Daigle), jlam