Cognitive Dissonance and Auditor Professional Skepticism.

• In Event: Professional skepticism

Abstract

Professional skepticism is critical to audit quality. In an empirical investigation of Nelson’s (2009) model of professional skepticism, this study explores how cognitive dissonance can influence the relationship between professionally skeptical (PS) judgment and PS action. In an experiment using attitude change as a proxy measure of cognitive dissonance (CD), professional auditor participants experience CD when they fail to take appropriate PS action in line with high PS judgment. CD leads auditors to lower ex-post risk assessments and to revise upward their view about the effectiveness of low diagnostic audit tests. Results also show that CD leads to exaggerated ex-post self-assessment of professional skepticism. We demonstrate a specific mechanism of how incentives can lower audit quality via a breakdown between PS judgment and PS action. This research can benefit both researchers and practitioners by better understanding how low PS actions can occur even when auditors exhibit high PS judgment.

Authors

• Ruwan Adikaram, University Of Minnesota Duluth

• Julia L Higgs, Florida Atlantic University - Boca