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Dissertation
Fraud risk assessments of independent auditors: the influence of similarity and risk on knowledge transfer from prior fraud risk assessments
Doctor of Philosophy (Ph.D.), Drexel University
Apr 2002
DOI:
https://doi.org/10.17918/00008234
Abstract
Generally accepted auditing standards require that, during the planning stage of the audit, the auditor consider and assess the likelihood that the financial statements are materially misstated. Research has indicated that auditors may have limited experience with financial statements that are materially misstated. This may be particularly true for financial statements that are misstated due to fraud. Research in psychology has suggested that, when faced with a novel, difficult, or ill-structured problem, individuals may use analogical reasoning (reasoning by analogy) as a problem-solving tool. An individual who uses analogical reasoning as a strategy to attempt to solve a problem (the target analog) will attempt to retrieve from memory a similar problem encountered or solved in the past (the source analog). Then, based on the perceived similarity of source and target, characteristics of the source may then be mapped to the target in an attempt to make inferences about the target problem and its solution. This study examines, in an experimental setting using practicing auditors as participants, the influence of surface and structural similarity features on analogical transfer from a source analog to a target analog in the context of the auditor's assessment of the risk of fraud. The effect of increased levels of risk in the target analog on analogical transfer is also examined. Results of the study indicate that auditors will transfer knowledge regarding the assessment of the overall risk of fraudulent financial reporting from a surface-similar source fraud risk assessment to a target fraud risk assessment. As expected, auditors did not exhibit transfer relating to the overall risk of fraudulent financial reporting when provided with a structurally similar source analog. Auditors did not transfer knowledge regarding the audit planning response to the fraud risk assessment. Increased fraud risk in the target analog did not influence auditors' risk assessments.
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Details
- Title
- Fraud risk assessments of independent auditors
- Creators
- Thomas M. Kozloski
- Contributors
- Henry R. Jaenicke (Advisor) - Drexel University, Drexel University (1970-)
- Awarding Institution
- Drexel University
- Degree Awarded
- Doctor of Philosophy (Ph.D.)
- Publisher
- Drexel University; Philadelphia, Pennsylvania
- Number of pages
- xi, 192 pages
- Resource Type
- Dissertation
- Language
- English
- Academic Unit
- Bennett S. LeBow College of Business; Drexel University
- Other Identifier
- 991021888891404721