Descriptive Evidence from Audit Practice on SAS No. 99 Brainstorming Activities

Gissel, Jodi L.; Johnstone, Karla M.

doi:10.2139/ssrn.1019573

Cited by 6 publications

(5 citation statements)

References 6 publications

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“…Trompeter et al (2013) place brainstorming in the framework of auditors' role in detecting fraud and argue that auditors should consider fraudulent act, concealment and conversion methods during the brainstorming sessions. Based on a survey conducted on 22 auditors by Bellovary and Johnstone (2007), the brainstorming sessions can be summarized as a four-step process, including client information review, fraud triangle analysis, fraud likelihood assessment and audit response indication.…”

Section: Brainstorming Sessions In Current Auditing Standardsmentioning

confidence: 99%

Financial fraud detection and big data analytics – implications on auditors’ use of fraud brainstorming session

Tang

Karim

2019

MAJ

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Purpose This paper aims to discuss the application of Big Data analytics to the brainstorming session in the current auditing standards. Design/methodology/approach The authors review the literature related to fraud, brainstorming sessions and Big Data, and propose a model that auditors can follow during the brainstorming sessions by applying Big Data analytics at different steps. Findings The existing audit practice aimed at identifying the fraud risk factors needs enhancement, due to the inefficient use of unstructured data. The brainstorming session provides a useful setting for such concern as it draws on collective wisdom and encourages idea generation. The integration of Big Data analytics into brainstorming can broaden the information size, strengthen the results from analytical procedures and facilitate auditors’ communication. In the model proposed, an audit team can use Big Data tools at every step of the brainstorming process, including initial data collection, data integration, fraud indicator identification, group meetings, conclusions and documentation. Originality/value The proposed model can both address the current issues contained in brainstorming (e.g. low-quality discussions and production blocking) and improve the overall effectiveness of fraud detection.

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Section: Brainstorming Sessions In Current Auditing Standardsmentioning

confidence: 99%

Financial fraud detection and big data analytics – implications on auditors’ use of fraud brainstorming session

Tang

Karim

2019

MAJ

View full text Add to dashboard Cite

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“…The paper compares three different types of discussion guidance that are or could be used in practice to generate a list of potential frauds. The interacting group without brainstorming is commonly used in practice (Bellovary and Johnstone 2007). Interacting groups with brainstorming have been developed in the psychology literature as a way of improving both individual and group outputs by encouraging CAR Vol.…”

Section: Carmentioning

confidence: 99%

“…99 refers to brainstorming whereas the international standards do not stipulate the type of group discussion. Bellovary and Johnstone (2007) provide descriptive evidence on how brainstorming sessions are currently being carried out in audit firms in the United States. They find that there are no formal brainstorming guidelines being used such as those provided by Osborn 1957, and there is considerable variation in the discussion format currently being used in audit firms at the audit planning stage.…”

Section: Introductionmentioning

confidence: 99%

Impact of the Type of Audit Team Discussions on Auditors' Generation of Material Frauds*

Trotman

Simnett

Khalifa

2009

Contemporary Accting Res

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“…In this experiment, we use individual judgments that do not capture dynamic team interactions. However, audit seniors' judgments and documentation can influence higher ranking members of the audit team (Hammersley, Johnstone, and Kadous ; Bellovary and Johnstone ; Ricchiute ). Firm partners that we interviewed indicated that seniors' judgments are important to the audit and that seniors are capable of addressing control deficiencies.…”

Section: Discussionmentioning

confidence: 99%

How Do Auditors Address Control Deficiencies that Bias Accounting Estimates?

Mauldin

Wolfe

2014

Contemporary Accting Res

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Auditors commonly rely on reviewing management's estimation process to audit accounting estimates. When control deficiencies bias the estimation process by creating omissions of critical inputs, standards require that auditors replace or supplement review of management's estimation process with tests that can identify the omissions. Importantly, overreliance on reviewing management's estimation process when it has been biased by a control deficiency can result in auditor acceptance of an inappropriate accounting estimate. We use an experiment to examine whether auditors recognize the insufficiency of increased sampling of a biased estimation process and their selection of alternative tests to replace or supplement review of the biased estimation process. We find that a significant minority (33 percent) of Big 4 senior auditors erroneously increase tests of management's biased estimation process. We also find that auditors have difficulty selecting alternative tests to replace or supplement review of management's biased estimation process, frequently choosing tests that are either ineffective or inefficient. Our findings suggest that auditors often reach inappropriate judgments about the capability of audit evidence to address control deficiencies and that nonsampling risk (judgment risk) may be a larger risk than auditors realize.

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Descriptive Evidence from Audit Practice on SAS No. 99 Brainstorming Activities

Cited by 6 publications

References 6 publications

Financial fraud detection and big data analytics – implications on auditors’ use of fraud brainstorming session

Financial fraud detection and big data analytics – implications on auditors’ use of fraud brainstorming session

Impact of the Type of Audit Team Discussions on Auditors' Generation of Material Frauds*

How Do Auditors Address Control Deficiencies that Bias Accounting Estimates?

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