Results of testing the interest expense misstatement risk are supportive of the results of McDaniel and Kinney (1995) and suggest that their findings that expectation formation sensitizes auditors to potential misstatements may be generalizable to regional (i.e., non-big 4) accounting firms. In contrast to the interest expense results (which indicate an unexpected change), our trade and promotion allowance results do not suggest that expectation formation improves the effectiveness of analytical procedures in all circumstances. When an account should change and does not, expectation formation did not lead auditors to be more sensitive to misstatement risk. In this situation, years of experience of the subjects lead to greater recognition of the underlying risk. Overall, results suggest expectation formation may be important in identifying unexpected changes in financial statement accounts. When faced with unexpected non-changes, however, experience appears to be more important than explicit expectation formation. As such, the use of an expectation formation decision aid in analytical procedures may not be equally effective in alerting auditors to all types of misstatements. Implications of these results are that the effective application of analytical procedures depends on both expectation formation and performance of analytics by more experienced personnel.