Auditor Creativity in Relation to Recognition of Fraud Cues and Response to Perceived Audit Risk

• In Event: Professional Skepticism and Fraud Detection

Abstract

The research examines whether differences in domains of creativity (assessed with standardized scales measuring workplace support of creativity, personality, degree of creative ideation, and thinking style) are associated with auditors’ recognition of fraud cues and audit plan changes in response to perceived fraud risk. Findings suggest a significantly positive relation between recognition of fraud cues and auditors’ personal commitment to work/employer, creative ideation, and tolerance of ambiguity and a negative relation with auditors’ preference for order, and close-mindedness. Similarly, a significantly positive relation was found between responses to perceived fraud risk and auditors’ personal commitment to work/employer, and creative ideation but a negative relation with auditors’ scores for close-mindedness, and planning style of thinking. The research provides evidence of auditor characteristics associated with their creativity that affect fraud recognition and response and holds substantial benefit for audit standards, practice, and inter-disciplinary research.

Authors

• Robert M Cornell, Oklahoma State University

• Eddward Herron, University of Wisconsin–La Crosse