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Do experienced auditors have a bias for confirmatory audit evidence?

Do experienced auditors have a bias for confirmatory audit evidence? In this study we experimentally test whether experienced auditors display a preference for confirmatory evidence when performing a routine part of a financial statement audit. We theorise that information auditors receive early during an audit leads them to form an initial belief about the correctness of an account balance. Subsequently, auditors may bias their evidence choices in a way that confirms their initial belief. We conducted a 2 × 2 between-subjects experiment with 97 experienced auditors. We manipulated whether early information came from a client's CFO or a firm partner and whether or not it supported the account balance as currently stated. We found that auditors selected more confirmatory evidence after receiving positive information from an audit partner compared to receiving the same information from a client's CFO. We found that experienced auditors selected more confirmatory evidence when the CFO provided negative information relative to when the CFO provided positive information. Keywords: audit evidence; confirmation bias; evidence search. Reference to this paper should be made as follows: O'Reilly, D.M. and Reisch, J.T. and Leitch, R.A. (2017) `Do experienced auditors have a bias for confirmatory audit evidence?', Int. J. Accounting, Auditing and Performance Evaluation, Vol. 13, No. 2, pp.187­198. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Accounting, Auditing and Performance Evaluation Inderscience Publishers

Do experienced auditors have a bias for confirmatory audit evidence?

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Publisher
Inderscience Publishers
Copyright
Copyright © 2017 Inderscience Enterprises Ltd.
ISSN
1740-8008
eISSN
1740-8016
DOI
10.1504/IJAAPE.2017.083030
Publisher site
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Abstract

In this study we experimentally test whether experienced auditors display a preference for confirmatory evidence when performing a routine part of a financial statement audit. We theorise that information auditors receive early during an audit leads them to form an initial belief about the correctness of an account balance. Subsequently, auditors may bias their evidence choices in a way that confirms their initial belief. We conducted a 2 × 2 between-subjects experiment with 97 experienced auditors. We manipulated whether early information came from a client's CFO or a firm partner and whether or not it supported the account balance as currently stated. We found that auditors selected more confirmatory evidence after receiving positive information from an audit partner compared to receiving the same information from a client's CFO. We found that experienced auditors selected more confirmatory evidence when the CFO provided negative information relative to when the CFO provided positive information. Keywords: audit evidence; confirmation bias; evidence search. Reference to this paper should be made as follows: O'Reilly, D.M. and Reisch, J.T. and Leitch, R.A. (2017) `Do experienced auditors have a bias for confirmatory audit evidence?', Int. J. Accounting, Auditing and Performance Evaluation, Vol. 13, No. 2, pp.187­198.

Journal

International Journal of Accounting, Auditing and Performance Evaluation – Inderscience Publishers

Published: Jan 1, 2017

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