Date of Award
2015
Document Type
Dissertation
Degree Name
PhD in Accountancy
Department
Department of Accountancy
First Advisor
Jay C. Thibodeau
Second Advisor
Jacob M. Rose
Third Advisor
Arnold M. Wright
Abstract
The objective of this dissertation is to examine professional skepticism in the audit environment and identify methods to promote professional skepticism in an overall effort to improve auditor judgment and decision making. This dissertation is made up of three studies, and each study’s purpose, methodology, and findings are summarized below.
The purpose of the first study is to examine the potential for simple metaphors to prime professional skepticism during an auditor’s professional judgment process. I empirically examine the effectiveness of using metaphors as non-conscious primes to activate a skeptical mindset. The results indicate that priming a skeptical mindset does in fact influence auditors’ judgments as auditors who were primed assessed a higher fraud risk and made corresponding changes to the audit plan. The findings suggest that nonconscious priming represents a powerful and efficient tool for promoting professional skepticism and expert-like judgments.
In the second study, I interview and survey current auditors about the incentives and pressures in the audit environment to better understand factors promoting or inhibiting professional skepticism. The results of the interviews and surveys provide new insight into the audit environment and aid experimental work in the area of incentive structures as an environmental factor influencing auditor decision making. The results also highlight the effect of experience on the perceptions of the incentive structures. Specifically, more experienced auditors were more likely to indicate that the pressure to meet budgets and efficiency targets hinders their professional skepticism.
Finally, in the third study, I experimentally examine the effectiveness of priming skeptical judgments when incentives are present. The findings indicate that when the incentive structure rewards efficiency, the participants are more likely to rely on confirming evidence and are less likely to recommend a write-down amount that is similar to experienced auditors. The presence of a counterfactual prime encourages the search for and reliance on disconfirming information when the efficiency incentive is present. These results support the use of counterfactual priming in practice as a method of enhancing professional skepticism.
Recommended Citation
Parlee, Mary C., "Promoting Professional Skepticism in the Audit Environment". 2015. 5.
https://scholars.bentley.edu/etd_2015/5
