The Influence of Collective Intelligence Factor on the Fraud Brainstorming Effectiveness of Traditional and Virtual Audit Groups

• In Event: Continental Breakfast - Research and Education Forum
  In Roundtable Session: Table 14: Fraud Detection

Abstract

Emerging research in psychology shows that collective intelligence, which captures the general ability of a group to perform a wide variety of tasks, is a strong predictor of group performance. I introduce the concept of collective intelligence to the auditing literature, and conduct an experiment to study its effect on fraud brainstorming effectiveness. I employ a between-subjects design in which 41 audit brainstorming groups, comprising 152 upper-level accounting students, are assigned to either an electronic or a face-to-face group condition. I hypothesize and find that collective intelligence predicts fraud brainstorming effectiveness overall, and that electronic groups are more effective than face-to-face groups. Neither average member intelligence nor maximum member intelligence is predictive of brainstorming effectiveness. I also find that high collective intelligence improves the brainstorming performance of electronic groups more than that of face-to-face groups, in line with expectations. Supplementary analysis of vocal, non-verbal interactions within groups indicates that speaking turn variance, as measured by wearable electronic sensors, is negatively correlated with both collective intelligence and fraud brainstorming effectiveness. These results imply that process losses associated with face-to-face brainstorming attenuate the countervailing beneficial impact of high collective intelligence, such that net process gains are less than those realized by electronic brainstorming groups. The results also suggest that higher performing brainstorming groups consist of members that participate more equally in group conversations and that are better at reading social signals, as compared to members of less effective groups.

Author

• Allen Hartt, Bentley University