Changing the Nature of Audit Procedures to Deter Fraud

• In Event: Fraud and Financial Reports

Abstract

Variation in the nature, timing, or extent of audit procedures is the recommended response when auditors perceive that the risk of fraud is present. However, when asked to vary audit procedures, auditors mostly vary the extent and timing even though variation in nature of audit procedures would be more effective in fraud detection. Varying audit procedures for each audit cycle will create ambiguity for clients as it would be difficult to predict the testing auditors would select. Narcissism, a member of the Dark Triad, is characterized by pride, vanity, grandiosity, and a lack of empathy. Studies have found that the levels of narcissism has been increasing at an increasing rate over the last 30 years. This study seeks to examine whether varying the nature of audit procedures may not only detect fraud (Zimbelman 1997), but will likely deter company employees from committing fraud in the first place.

Authors

• Alyssa Sui Jing Ong, West Virginia University

• Darin Kip Holderness, West Virginia University

• Arron Scott Fleming, West Virginia University