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 recei...