Impact of the Type of Audit Team Discussions on Auditors' Generation of Material Frauds*

The Effect of Partner Communications of Fraud Likelihood and Skeptical Orientation on Auditors' Professional Skepticism

“…The case material was an abbreviated version of that used in Trotman et al (2009), which was based on an actual training case used by a Big 4 firm. The case includes potential frauds arising from the brainstorming session that are plausible, but for which the partner holds the view that there is a low likelihood of material misstatement due to fraud.…”

“…The brainstorming notes also contained a list of 12 possible frauds identified by the audit team at the brainstorming session. Six of these frauds were derived from the answer to the case provided by the Big 4 firm and six from the frauds identified by participants in Trotman et al (2009). The 12 frauds are listed in Table 1.…”

“…Six of the frauds were derived from the answer to the Big 4 training case upon which our materials were based (Potential Frauds 1 to 6). The remaining six frauds were identified by participants using almost identical materials in Trotman et al (2009) (Potential Frauds 7 to 12).…”

“…While there has been considerable experimental research in auditing on how different group structures affect the quantity and quality of output from the brainstorming sessions (Carpenter 2007;Hoffman and Zimbelman 2009;Trotman, Simnett, and Khalifa 2009;Chen, Trotman, and Zhou 2015), none of this research has addressed the impact of partner communications on professional skepticism. Dennis and Johnstone (2015) examine how an audit partner-led intervention related to leadership behaviors in fraud brainstorming sessions improves some brainstorming processes (including increases in professional skepticism) and some brainstorming outcomes (including the number of fraud risks identified).…”

Fifty-year overview of judgment and decision-making research in accounting

“…US auditing standards have the same requirement but instead of using the word 'discussion' they use the term 'brainstorming'. Recent JDM experiments that have examined this process have adopted this label of brainstorming (Carpenter, 2007;Hoffman and Zimbelman, 2009;Trotman et al, 2009;Hunton and Gold, 2010). Carpenter (2007) compares nominal groups (combinations of individuals who have not met face to face) and interacting groups on a brainstorming task and finds that face-to-face brainstorming does not increase the quantity of frauds listed but does increase the quality of the items listed.…”