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Auditors’ “Covering Your Bases” Strategies
Anna Cianci,
Drexel University
James Bierstaker, Villanova University
ABSTRACT. This paper proposes a new strategy that auditors use in response to increased efficiency demands – i.e., “Covering Your Bases” (CYB) strategies defined as the discounting (emphasizing) negative (positive) information and making favorable likelihood assessments. We propose that increased time pressure will exacerbate auditors’ use of CYB strategies but that experience will mitigate this tendency. We conduct an experiment in which 83 auditors differing in experience evaluated internal control effectiveness under high or low time pressure. Consistent with expectations, we find that auditors under high (compared to low) time pressure: (a) rate negative (positive) information about controls as less (more) relevant, and (b) assess overall internal control effectiveness higher. Also consistent with expectations, under high time pressure, less experienced auditors employ more CYB strategies than more experienced auditors.
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