Overcoming Communication Challenges: Can Taking the Specialist’s Perspective Improve Auditors’ Critical Evaluation and Integration of the Specialist's Work?

• In Event: Audit team communication/knowledge sharing

Abstract

This study investigates whether perspective taking (adopting the expert’s perspective) improves auditor’s processing of highly technical evidence when the communication complexity (i.e., the presentation of technical information) is high versus when it is low. We also anticipate that communication complexity contributes to the challenges auditors encounter in critically evaluating and integrating technical information when auditing complex estimates. We find that holding the information content in the expert’s evidence constant, but varying the degree of communication complexity in the expert’s (e.g., specialist’s) evidence results in audit judgments that are consistent with lower critical evaluation and integration when communication complexity is high versus when it is low. However, when auditors adopt the specialist’s perspective prior to reviewing high communication complexity specialist evidence, they exhibit higher critical evaluation and integration of the evidence than auditors who maintained an auditor’s perspective. Specifically, the auditors who engage in specialist perspective taking and elect to follow-up on the specialist’s evidence pursue more follow-up questions and allocate more audit effort to testing the specialist’s evidence than the other auditors. Regulators and auditors identify these follow-up actions as important inputs to audit quality. Thus, this study provides the first evidence that adopting a specialist’s perspective when auditors are at an expertise disadvantage has the potential to enhance auditor’s judgments and decision-making, which has implications for collaboration across geographically-distributed and cross-functional teams.

Authors

• Jennifer R Joe, University of Delaware

• Yi-Jing Wu, Texas Tech University

• Aleksandra B Zimmerman, Northern Illinois Universtiy