Using an Expert System to Debias the Acceptability Heuristic in Auditor Judgment

• In Event: Auditing 3

Abstract

In the audit profession, judgment and decision making are essential parts of successfully completing an audit, especially with recent increase in audit regulations. Psychology and audit research demonstrate that auditors are susceptible to numerous biases, some of which are exacerbated by the accountability inherent in the audit environment. This study focuses on one of these biases, the acceptability heuristic, and experimentally examines whether use of an expert system assists less experienced auditors in making lower fraud risk assessments and mitigates this bias. The acceptability heuristic is the shifting towards the preferences of another and adopting a position that is deemed socially acceptable. Prior studies have shown less experienced auditors who are aware of the views of audit partners, will align their judgments to agree with that of the partners’. This negative auditor judgment bias has been an area researchers have vastly studied, yet a method to reduce it has not been offered in the literature. Through the use of the expert system AudEx, this negative bias was materially mitigated in lower level auditors.

Author

• danielle lombardi, Villanova University