DEVELOPING THE AUDITOR’S CREATIVE THINKING SKILLS TO REDUCE MITIGATING THE POTENTIAL RISKS ASSOCIATED WITH MATERIAL MISREPRESENTATION

Abstract

The primary objective of this study is to examine the correlation between the creative thinking abilities of external auditors and their effectiveness in mitigating significant misstatements. The aim is to enhance the competencies of auditors operating within Iraq's public and private sectors. Given the challenges businesses and government organizations encounter in dealing with fraud and the manipulation of financial statements, it is imperative to address the issue of shading, which is commonly observed in such instances.A questionnaire was utilized to examine the effect and ascertain the correlation between the variables; a questionnaire was subsequently divided into two distinct sections. The initial study focused on assessing the creative thinking abilities of auditors, whereas the subsequent study aimed to evaluate the extent to which fundamental misstatements were reduced. The initial section comprised a total of 19 inquiries, while the subsequent section encompassed 18 inquiries. A total of 225 questionnaires were given to auditors working at auditing offices. The Federal Bureau of Financial Supervision personnel and its 205 members were obtained. The study employed simple linear regression analysis using the method of least squares to test hypotheses. The findings indicated that external auditors typically exhibit a strong inclination toward generating suggestions that facilitate the development of the audit program and the selection of sample sizes. He can also engage in productive discourse using unambiguous language when presenting specific observations on material misrepresentation faults to the department or corporate executives, aiming to identify and resolve suitable remedies.