Training Auditors to Perform Analytical Procedures Using Metacognitive Skills

Abstract

ABSTRACT:Although lower-level auditors increasingly carry out mandatory analytical procedures (APs) in audits, they do not perform as well as partners and managers. In order to improve performance in APs by lower-level auditors, we investigated tasks requiring creativity, where training in metacognition-consciously thinking about one's thought process-improves task performance. As a result, we train lower-level auditors to use a sequential thought process comprised of two metacognitive skills: divergent thinking, where they generate explanations for unusual evidence, followed by convergent thinking, where they evaluate explanations generated and eliminate those judged infeasible. To test the efficacy of our training, we conducted an experiment with three conditions: both divergent and convergent thinking, divergent thinking only, and a control. We found that training auditors in only divergent thinking increases both the number and quality of explanations generated for an unusual situation. However, the combination of divergent and convergent thinking training leads to improved explanation generation over divergent thinking alone and, more importantly, leads to a greater likelihood of generating and choosing the correct explanation.

Real effects of reporting key audit matters on auditors' judgment and choice of action

“…To mitigate these cognitive or motivational biases and enhance the professional skepticism when auditing accounting estimates, recent studies have examined the use of various debiasing strategies. In addition to the efforts targeted at changing auditors' ways of thinking (e.g., Backof, Bamber, & Carpenter, ; Griffith, Hammersley, Kadous, & Young, ; Plumlee, Rixom, & Rosman, ; Rasso, ), another strategy aims to change auditors' motivations. In this latter line of research, a central area of interest is the creation of accountability (e.g., Kennedy, , ), such as through different forms of disclosure or justification requirements.…”

Auditor Mindsets and Audits of Complex Estimates

“…Further, audit quality is improved by interventions designed to directly address auditors' critical thinking (Hoffman and Zimbelman [2009], Simon [2012]). Performance of analytical procedures is also improved by such interventions (Brewster [2011], Plumlee, Rixom, and Rosman [2014]). Thus we view interventions that facilitate critical thinking as potentially valuable in improving audits of estimates.…”

Discussion of construal instructions and professional skepticism in evaluating complex estimates

“…Rasso's study complements a growing stream of auditing research (e.g., Backof, Bamber, & Carpenter, 2014;Griffith, Hammersley, Kadous, & Young, 2015) that changes the way auditors interpret information by changing the level at which they construe information or by manipulating the mindset they adopt to see how doing so influences their judgments and behaviors. These studies also add to the recent literature examining how instructional interventions or training can increase auditors' professional skepticism (e.g., Plumlee, Rixom, & Rosman, 2015).…”