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The comparative effect of process and outcome accountability in enhancing professional scepticism

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  • Sarah Kim
  • Ken T. Trotman
  • Neil Fargher

Abstract

type="main" xml:id="acfi12084-abs-0001"> Responding to concerns about insufficient professional scepticism in audits (e.g. PCAOB, , ; ASIC, ), we investigate the effect of process and outcome accountability in enhancing the level of professional scepticism and the differences in effects across audit experience levels. In our experiment, we manipulate the type of accountability (outcome versus process) for both novice auditors and audit seniors. We examine the effect on four measures of professional scepticism and find that auditors show greater levels of professional scepticism when they are expected to justify their judgment process, rather than their final judgments. Our results also show that the professional scepticism of novice auditors improves to a greater extent than that of more experienced auditors (audit seniors) under process accountability.

Suggested Citation

  • Sarah Kim & Ken T. Trotman & Neil Fargher, 2015. "The comparative effect of process and outcome accountability in enhancing professional scepticism," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 55(4), pages 1015-1040, December.
    • Handle: RePEc:bla:acctfi:v:55:y:2015:i:4:p:1015-1040
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    File URL: http://hdl.handle.net/10.1111/acfi.2015.55.issue-4
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    Cited by:

    1. Mina Ličen & Sergeja Slapničar, 2022. "Can process accountability mitigate myopic biases? An experimental analysis," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 33(1), pages 1-26, March.
    2. Maciej Ciołek & Izabela Emerling, 2019. "Can We Shape Trait Professional Skepticism through University Accounting Programs? Evidence from Polish University," Sustainability, MDPI, vol. 11(1), pages 1-30, January.
    3. Christopher J. Wolfe & Brant E. Christensen & Scott D. Vandervelde, 2020. "Intuition versus Analytical Thinking and Impairment Testing†," Contemporary Accounting Research, John Wiley & Sons, vol. 37(3), pages 1598-1621, September.
    4. Sammy Xiaoyan Ying & Chris Patel & Aeson Luiz Dela Cruz, 2023. "The influence of partners' known preferences on auditors' sceptical judgements: The moderating role of perceived social influence pressure," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3193-3215, September.
    5. Dalla Via, Nicola & Perego, Paolo & van Rinsum, Marcel, 2019. "How accountability type influences information search processes and decision quality," Accounting, Organizations and Society, Elsevier, vol. 75(C), pages 79-91.

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