The psychology in auditing: Auditors' cognitive biases and how to mitigate them

Abstract

This paper examines how auditors' cognitive biases can affect the process and results of financial statements audit. The influence of psychology occurred much earlier in some economic disciplines, while it has only recently been considered in auditing. The academic and professional education of auditors usually does not include courses in the field of psychology, therefore auditors are generally unconscious that they are subject to these, also unconscious, biases. Biased audit procedures and collected biased evidence can lead to a biased auditor's opinion on financial statements, with major negative consequences for investors and the economy as a whole. Increasing awareness of biases to which they are exposed in their work, as well as suggesting ways to mitigate them and appropriate training of auditors are, therefore, of utmost importance.