|
Impact of the Type of Audit Team Discussions on Auditors’ Identification and Mental Simulations of Material Frauds
Ken T Trotman,
University of New South Wales
Roger Simnett, University of New South Wales
Amna S Khalifa, University of New South Wales
ABSTRACT. Recent changes to international auditing standards make it compulsory for members of the audit team to discuss the susceptibility of the entity to fraudulent statements. Our study tests whether two enhanced forms of interacting processes (brainstorming guidelines and premortem) have advantages over a standard interacting group (control group). The only difference between the control group and the brainstorming group is the latter is provided with the standard brainstorming guidelines. Premortem is a variation of the mental simulation idea developed by Klein (1999). We found that both the brainstorming treatment and the premortem treatment generated a larger number of potential frauds than our interacting group without brainstorming rules. These results were robust across a range of dependent variables used to measure quantity and quality of items. We also found that those who estimated a higher likelihood of fraud provided a more complete mental simulation.
Full-Text is no longer available online. Please contact the author(s) for more information about this manuscript.
Back to Session Listing
|