Solving the Puzzle: Helping Auditors Find Fraud in Evidence Evaluation

Austin, Ashley A.; Carpenter, Tina

doi:10.2139/ssrn.2951396

Cited by 1 publication

(1 citation statement)

References 97 publications

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“…Some categorization rules include, similarity, status differentials, age, personality, hierarchical level within an organization, technical accounting knowledge, managerial skills, business experience, and alumni status (Wilson and Kayatani 1968;Billig and Tajfel 1973;Dion 1973;Brewer 1979;Finkelstein, Burke, and Raju 1995;Menon and Williams 2004;Lennox 2005;Gino, Ayal, and Ariely 2009;Pickerd et al 2015;Austin and Carpenter 2017). As such, it is possible, and likely, that staff auditors are part of many different in-groups because of different means of classification.…”

Section: In-group Bias Theorymentioning

confidence: 99%

The copycat effect: do social influences allow peer team members' dysfunctional audit behaviors to spread throughout the audit team?

Wetmiller

2021

JAAR

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PurposeThis study seeks to identify the role that peer team members' behaviors and superiors' preferences play in influencing the likelihood that staff auditors engage in dysfunctional audit behavior (DAB).Design/methodology/approachThis study uses an experiment that manipulates peer team member behavior (DAB present or DAB absent) and superior preference (efficiency or effectiveness). Students enrolled in a graduate accounting course, proxying for inexperienced staff auditors, receive an internal control sample selection task. Participants assess the likelihood that a typical staff auditor would engage in DAB or non-DAB.FindingsFirst, staff auditors with a peer team member who engages in DAB are more likely to engage in DAB. Second, staff auditors who have a superior with a preference toward efficiency are more likely to engage in DAB. Finally, when considered simultaneously, the effect of the superior's preference on the likelihood of staff auditors engaging in DAB is not different for staff auditors, subject to a peer engaging in DAB versus those subject to a peer who engaged in a non-DAB.Research limitations/implicationsThis study uses a hypothetical audit team, a written script of team member communication, and students proxying for inexperienced staff auditors. As such, future studies might consider improving the realism of the team setting, the manner in which a message is portrayed, and implications at higher levels within the audit team hierarchy.Practical implicationsTeam interactions contribute to the prevalence of DAB within the profession. Specifically, inexperienced auditors are influenced by the behavior of peer and superior team members and this may be one cause of the prevalence of DAB within the profession. As such, future firm considerations could include well-structured mentorship programs and rewards structures.Originality/valueThis study adds to the audit team literature by investigating the influence of audit team dynamics on staff auditors' behaviors. This paper extends the current audit team literature, that is mostly focused on supervisor–subordinate relationships, by investigating social influences from peers and superiors. This study's findings inform public accounting firms of areas in which personnel may negatively affect audit quality through intra-team interactions.

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Section: In-group Bias Theorymentioning

confidence: 99%

The copycat effect: do social influences allow peer team members' dysfunctional audit behaviors to spread throughout the audit team?

Wetmiller

2021

JAAR

View full text Add to dashboard Cite

show abstract

Solving the Puzzle: Helping Auditors Find Fraud in Evidence Evaluation

Cited by 1 publication

References 97 publications

The copycat effect: do social influences allow peer team members' dysfunctional audit behaviors to spread throughout the audit team?

The copycat effect: do social influences allow peer team members' dysfunctional audit behaviors to spread throughout the audit team?

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