Affiliation:
1. University of Richmond
2. The University of Georgia Associate Professor J.M. Tull School of Accounting Terry College of Business A324 Moore-Rooker Hall 600 S. Lumpkin Street UNITED STATES Athens GA 30602 7063726536
Abstract
Regulators express concern over auditors’ failure to respond to fraud risks. Audit firms communicate the importance of remaining skeptical and alert for fraud, but busy auditors give these messages insufficient attention. Building on psychology theory, we develop an innovative intervention designed to improve audit firm communication by incorporating game-like elements. We expect game-like elements to pique auditors’ interest, deepen their cognitive processing, enhance their awareness of important fraud concepts, and make them more alert for fraud. We experimentally demonstrate that the intervention improves auditors’ awareness of important fraud concepts, and these benefits persist to improve auditors’ fraud detection actions. Importantly, auditors receiving communication that simulates current practice fail to respond to heightened fraud risk, confirming regulators’ concerns. In additional analyses, a model supports our intervention promoting deeper processing of the communication, enabling auditors’ subsequent recognition of heightened fraud risk and effective actions. Thus, our results contribute to theory and practice.
Publisher
American Accounting Association
Subject
Economics and Econometrics,Finance,Accounting
Cited by
1 articles.
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