The Effect of Business Process Representation Type on Assessment of Business and Control Risks: Diagrams versus Narratives

Abstract

The Sarbanes-Oxley Act (SOX) (U.S. House of Representatives 2002) mandates the assessment of internal controls over financial reporting, and many organizations are using diagrams to document their internal control processes. While educators regularly stress the effectiveness of diagrammatic representation of process information over textual representation, no prior study has offered convincing evidence that diagrammatic representation leads to improved performance. In an experiment, we examine students' performance on a business process risk and control assessment task using two informationally equivalent methods that are commonly taught in the classroom to document business processes: descriptive narrative (hereafter, textual) and diagrammatic. We also examine whether students' academic achievement and perceptions of their ability (self-efficacy) affect performance by type of representation. First, we find that while the method of representation has no effect on students' accuracy, those receiving the textual representation were more efficient and had a greater weighted-average performance than those receiving the diagrammatic representation. Second, we find academic achievement increases students' accuracy, decreases their efficiency, and has no effect on their weighted-average performance. Third, we find self-efficacy has no effect on students' accuracy, has no effect on their efficiency, and decreases their weighted-average performance. Finally, we find that both self-efficacy and academic achievement interact with the type of representation to affect students' performance. Implications for education and practice are discussed.

The Influence of Business Process Representation on Performance of Different Task Types

“…Business process analysis using models plays an important role for improving time, cost and quality of business operations (Dumas et al 2013). Business process models are not only useful for performance analysis, but also for assessing the effectiveness of internal controls in financial reporting (Boritz, Borthick, and Presslee 2012). While already Bell et al (1997) processes for auditing purposes.…”

“…Research in Accounting Information Systems (AIS) has long recognized the importance of information representation (Kelton, Pennington, andTuttle 2010, Dunn, Gerard, andGrabski 2017). The representation of business processes plays an important role in this context, since auditors have the choice between various types of textual and visual representations (Boritz, Borthick, and Presslee 2012). Business processes can be described using text or using visual models like the flowchart standard Business Process Model and Notation (BPMN).…”

“…Their results indicated that participants find the visual representation easier to use, used it faster, and they were more satisfied with it (no impact on accuracy). Boritz, Borthick, and Presslee (2012) compared the effect of providing either a visual or a textual representation of a business process on the accuracy and efficiency of students' risk assessment. They found that the textual representation resulted in a higher efficiency (no impact on accuracy), which seems to contradict the findings of Dunn and Gerard (2001) at a first glance.…”

“…Indeed, also studies in software engineering on representation formats have provided partially inconclusive results (Whitley 1997). Boritz, Borthick, and Presslee (2012) emphasize that the instrumentation of a different task might lead to different results regarding the mutual benefits of visual and textual representations. This paper builds on this observation and systematically investigates the affinity of the representation format with different task types.…”

Determinan Kinerja Bank Islam

“…Kontribusi pertumbuhan perbankan syariah di Indonesia dapat dikatakan rendah, yakni sebesar 30% (Bank Indonesia, 2013; Direktorat Perbankan Syariah, 2012). Rendahnya bagi hasil tersebut dikarenakan pengguna layanan perbankan syariah masih rendah, yaitu 10% (Sargent, 2013;Boritz, Borthick, & Presslee, 2012;Khan, 2011). Namun, seiring dengan perkembangan bank Islam, para peneliti setuju bahwa bank Islam menerapkan prinsip profit loss sharing (Ali & Azmi, 2016;Johnson, Reckers, & Bartlett, 2014;Pepinsky, 2013;Siregar, 2016).…”