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The effects of fraud risk assessments and a risk analysis decision aid on auditors’ evaluation of evidence and judgment

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  • Anna M. Rose
  • Jacob M. Rose

Abstract

Using a sample of 258 auditors, two experiments were conducted to study the effects of fraud risk assessments and an automated decision aid on auditors’ evaluation of evidence and judgment. Results indicate that the assessed level of fraud risk systematically affects the evaluation of evidence by auditors. More specifically, auditors facing high levels of assessed fraud risk evaluate audit evidence more thoroughly than auditors facing low levels of assessed fraud risk. In addition, auditors facing high risk assessments exhibit an unexpected bias in their decision processes. These auditors focus on the last evidence received during decision making, and their decisions change when evidence order is altered. The introduction of a computer‐based decision aid promotes consistency in auditor decisions and eliminates the undesirable effects of evidence order, while preserving the benefits of more thorough evidence evaluation.

Suggested Citation

  • Anna M. Rose & Jacob M. Rose, 2003. "The effects of fraud risk assessments and a risk analysis decision aid on auditors’ evaluation of evidence and judgment," Accounting Forum, Taylor & Francis Journals, vol. 27(3), pages 312-338, September.
    • Handle: RePEc:taf:accfor:v:27:y:2003:i:3:p:312-338
    DOI: 10.1111/1467-6303.00108
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    Cited by:

    1. Bianchi, Emily C. & Brockner, Joel, 2012. "In the eyes of the beholder? The role of dispositional trust in judgments of procedural and interactional fairness," Organizational Behavior and Human Decision Processes, Elsevier, vol. 118(1), pages 46-59.
    2. Sammy Xiaoyan Ying & Chris Patel, 2015. "The Influence of Partners? Views on Chinese Auditors? Judgments Related to Professional Scepticism," Proceedings of Business and Management Conferences 2304228, International Institute of Social and Economic Sciences.
    3. Anna Rose & Jacob Rose, 2008. "Management Attempts to Avoid Accounting Disclosure Oversight: The Effects of Trust and Knowledge on Corporate Directors’ Governance Ability," Journal of Business Ethics, Springer, vol. 83(2), pages 193-205, December.

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