An Audit Partner-Led Field Intervention in Fraud Brainstorming

• In Event: Fraud 2

Abstract

In a field experiment, we manipulate guidance to audit partners through an intervention related to leadership behaviors in fraud brainstorming sessions in practice. The intervention is associated with improvements in brainstorming processes (increases in professional skepticism and the extent of discussion about how management might perpetrate fraud) as well as fraud risk factor identification outcomes (the numbers of fraud risks and new fraud risks). The intervention is also associated with some fraud risk response outcomes (the respective percentages of responses related to the nature of procedures as opposed to the extent or timing of procedures), but not others (the numbers of procedures, new procedures, and procedures incorporating unpredictability). This latter finding is consistent with prior experimental research showing that auditors experience difficulties in responding to identified fraud risks. Overall, this study illustrates that interventions can improve audit partner leadership behavior in brainstorming, thereby enhancing certain brainstorming processes and outcomes.

Authors

• Sean Dennis, University of Wisconsin–Madison

• Karla Johnstone, University of Wisconsin–Madison