The Effects of Auditor Certification, Professional Skepticism, and the Presence of Fraud on Fraud Risk Assessment Performance

• In Event: Public Interest 1

Abstract

The purpose of this proposed quantitative experimental research study will be to examine the theoretical underpinnings of fraud and attribution as it relates to what will be the independent variables under investigation of auditor certification, professional skepticism, and the presence of fraud and the dependent variable, fraud risk assessment performance, for participants within the U.S. that are certified fraud examiners and associate members of the ACFE. Auditor certification will be categorized by the identification of certification attributes (CFE or CFE/CPA and CPA). Professional skepticism will be measured by using Hurtt’s (2010) six-point Likert skepticism scale to classify the trait of professional skepticism into high and low levels. Fraud risk will be operationalized by the use of two sets of financial statement data from the Securities and Exchange Commission’s (SEC) public database for the years 2005 – 2014 of which one set will contain high-fraud risk and one set will contain low-fraud risk. Fraud risk assessment performance will measure the auditors’ ability to assess fraud risk. The population will be U.S. certified fraud examiners (CFEs) and U.S. associate members of the Association of Certified Fraud Examiners (ACFE. Members will be invited to participate in the experiment using either ACFE’s online forum or by an invitation from the ACFE. The experimental construct will be a 2 X 2 X 2 ANOVA design with two levels for each of the three independent variables. An examination will be conducted as a between-participants design to test the fraud risk variable. SPSS will be used to conduct a three-way analysis of variance (ANOVA) to determine the effect that the categorical independent variables (auditor certification, professional skepticism, and the presence of fraud risk) have on the interval dependent variable, fraud risk assessment performance. Post hoc tests will also be conducted in SPSS to determine interaction effects.

The proposed research questions will examine the influence of auditor certification, professional skepticism, and the presence of fraud risk on fraud risk assessment performance by answering the questions: (a) Does the presence of fraud risk have an effect on fraud risk assessment performance?, (b) Does professional skepticism have an effect on fraud risk assessment performance?, and (c) Does a certification in fraud knowledge have an effect on fraud risk assessment performance?.

Author

• Cynthia Elaine Vance, PhD Student