Maximizing the contribution of JDM-style experiments in accounting

Kadous, Kathryn; Zhou, Yuepin

doi:10.4324/9781315710129-13

Cited by 13 publications

(8 citation statements)

References 27 publications

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“…The justification question read: “Briefly summarize the reasons for your evaluation in the box below. When writing your summary, be sure to include your explanations and justifications for your evaluation.” This question's format retains consistency with the natural audit task and allows us to relatively unobtrusively observe the evidence participants attended to and how they interpreted and synthesized it to make their judgments (Asay et al 2021; Hauser et al 2018; Kadous and Zhou 2018).…”

Section: Experimental Methodsmentioning

confidence: 99%

Improving Complex Audit Judgments: A Framework and Evidence*†

Griffith

Kadous

Young

2021

Contemporary Accting Res

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Regulators and researchers provide evidence that auditors' judgment quality is problematic in complex audit tasks. We introduce a framework for improving auditor judgment in these tasks. The framework builds on dual‐process theory to recognize that high‐quality judgment in complex tasks requires that auditors (i) possess the knowledge needed for the task, (ii) recognize the need for analytical (versus heuristic) processing, and (iii) have sufficient cognitive capacity to complete the analytical processing. Based on the framework, we predict that auditors' need for cognition (NFC), a characteristic theoretically linked to recognizing the need for analytical processing, is associated with higher quality complex judgments. Analysis of 11 studies supports this assertion. We demonstrate the usefulness of the framework by predicting and finding that priming auditors with an accuracy goal improves judgments, particularly for lower NFC auditors, who are less likely to spontaneously engage in analytical processing. The framework facilitates systematic development of interventions to improve auditor judgment by highlighting that solutions should address the specific conditions causing judgment problems.

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Section: Experimental Methodsmentioning

confidence: 99%

Improving Complex Audit Judgments: A Framework and Evidence*†

Griffith

Kadous

Young

2021

Contemporary Accting Res

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“…Second, by emphasizing mutual goals between the auditor and the client and by claiming the benefit of doubt in cases of high estimation uncertainty, implicit client pressure seems to be more suitable to initiate a rationale from the perspective and in favor of the client. Third, this kind of one‐dimensional manipulation avoids the risk of manipulating various constructs that can inhibit causal inference (Kadous & Zhou, ).…”

Section: Methodsmentioning

confidence: 99%

Real effects of reporting key audit matters on auditors' judgment and choice of action

Asbahr

Ruhnke

2019

Int J Auditing

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This experimental study analyzes whether reporting an accounting estimate as a key audit matter (KAM) can influence auditor judgment about the accounting estimate and the corresponding action. We find that skeptical action in the form of proposed adjustment amounts is significantly lower when the accounting estimate is reported as a KAM. Thus, the disclosure of a KAM can serve as a moral license to waive an adjustment. Taking into account that the KAM disclosure does not affect auditors' skeptical judgments in the form of a reasonableness assessment of the accounting estimate, our results indicate the existence of a judgment–action gap. Furthermore, implicit client pressure does not enlarge the moral licensing effect of the KAM disclosure. We also find evidence that audit effort is not affected by reporting a KAM. Overall, our study contributes to the current debate about the audit reporting model by showing that reporting a KAM might have unintended “real effects” on auditors' actions.

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“…14. Priming intrinsic motivational orientation before the task rather than incorporating it into the audit task allows for strong inferences about the effect of our independent construct (Kadous and Zhou 2018). Of the eight studies that manipulated the salience of intrinsic motivation, six used supraliminal priming and two used subliminal priming.…”

Section: Independent Variablementioning

confidence: 99%

How Does Intrinsic Motivation Improve Auditor Judgment in Complex Audit Tasks?

Kadous

Zhou

2018

Contemporary Accting Res

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Intrinsic motivation is generally thought to be positively associated with performance on a variety of tasks. However, there is only sparse experimental evidence supporting this idea and we know little about the specific mechanisms behind any effect. We develop theory about how auditors' intrinsic motivation for their jobs can improve their judgments about complex accounting estimates. We experimentally test whether a prompt to make auditors' intrinsic motivation for their jobs salient improves the specific information processing behaviors necessary for high-quality judgments in complex audit tasks. It does: Prompted auditors attend to a broader set of information, process information more deeply, and request more relevant additional evidence. Supplemental analyses show that these processing behaviors mediate between salient intrinsic motivation and an improved ability to identify a biased complex estimate. Our theory and analyses indicate that auditors' intrinsic motivation for their work provides unique value for improving judgment quality, particularly in the context of performing complex audit tasks. Our study supports the view that high-quality cognitive processing can improve auditors' professional skepticism by providing a foundation for skeptical judgments.Comment la motivation intrinsèque améliore-t-elle le jugement des auditeurs dans les tâches d'audit complexes ? RÉSUMÉ L'on s'entend généralement sur l'existence d'un lien positif entre la motivation intrinsèque et le rendement dans l'exécution de diverses tâches ; les données expérimentales confirmant la présence de ce lien sont toutefois peu nombreuses, et nous connaissons mal les mécanismes précis qui lui servent de vecteur. Les auteurs élaborent une théorie quant aux modalités selon lesquelles la motivation intrinsèque des auditeurs, dans l'exercice de leurs fonctions, peut améliorer leur jugement à l'égard des estimations comptables complexes. Ils procèdent à un test expérimental afin de déterminer si un encouragement visant à stimuler la motivation intrinsèque des auditeurs dans leur travail améliore les comportements spécifiques de traitement de l'information nécessaires à la formulation de jugements de qualité dans des tâches d'audit complexes. Les résultats du test se révèlent positifs : les auditeurs dont la motivation intrinsèque est stimulée s'intéressent à un éventail plus large d'informations, approfondissent davantage le traitement de ces informations et réclament des éléments probants supplémentaires plus pertinents. Des analyses complémentaires indiquent que ces comportements à l'égard du traitement de l'information ont un effet de médiation entre la motivation intrinsèque stimulée et une capacité accrue de percevoir les estimations complexes peu fiables. Selon la théorie et les analyses des auteurs, la motivation intrinsèque des auditeurs dans leur travail joue un rôle exclusif dans l'amélioration de la qualité du jugement, en particulier dans le contexte de tâches d'audit complexes. L'étude confirme l'idée selon laquelle un traitement...

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Maximizing the contribution of JDM-style experiments in accounting

Cited by 13 publications

References 27 publications

Improving Complex Audit Judgments: A Framework and Evidence*†

Improving Complex Audit Judgments: A Framework and Evidence*†

Real effects of reporting key audit matters on auditors' judgment and choice of action

How Does Intrinsic Motivation Improve Auditor Judgment in Complex Audit Tasks?

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