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Why Auditors are Unable to See Their Own Behaviors as Others Do: Understanding a Potential Blind Spot

Frank, Michele (2015) Why Auditors are Unable to See Their Own Behaviors as Others Do: Understanding a Potential Blind Spot. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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Auditors are obligated to perform audits that are both effective and efficient. Audit firms train their auditors to avoid behaviors such as taking shortcuts (i.e., ignoring inconsistencies that they observe in the audit workpapers) when taking the shortcut could cause the firm to miss a material error and/or be viewed negatively by others. This study examines why auditors sometimes take shortcuts that put their firms at risk of issuing an incorrect audit opinion, despite their firm’s training and the threat of receiving a negative performance evaluation. Using an experiment, I examine (1) why auditors who face the dilemma of whether to take the shortcut (actors) are likely to view taking the shortcut more favorably than do other auditors and non-auditors who observe their dilemma (observers), (2) why auditors are likely to view a decision to take the shortcut less negatively than do non-auditors, and (3) whether auditors recognize that others are likely to perceive taking the shortcut as more unethical than do auditors. I find that being directly involved in the dilemma (being an actor versus an observer) causes auditors to perceive a lower likelihood that taking a shortcut could cause the audit firm to miss a material error. I also find that having an auditing background (being an auditor versus a non-auditor) causes auditors to perceive a lower likelihood that taking the shortcut will harm investors. These differences in perception cause auditor actors to perceive taking a shortcut as less unethical than do auditor observers, and auditor observers to view it as less unethical than do non-auditor observers. I demonstrate that understanding factors that cause individuals to view the ethicality of taking the shortcut differently is important because individuals’ ethicality judgments influence their intended behavior. Finally, my findings suggest that auditors fail to recognize that non-auditors perceive taking the shortcut more negatively than do auditors. I discuss implications of these findings for audit firm training and for auditors’ ability to objectively assess the costs and benefits of their behavior.


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Item Type: University of Pittsburgh ETD
Status: Unpublished
CreatorsEmailPitt UsernameORCID
Frank, Michelemlf48@pitt.eduMLF48
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee ChairHoffman, Vickyvickyh@katz.pitt.eduHEIMAN
Committee MemberEvans, Johnjhe@katz.pitt.eduJHE
Committee MemberMoser, Donalddmoser@katz.pitt.eduMOSER
Committee MemberChoi, Jongwoonjchoi@katz.pitt.eduJWCHOI
Committee MemberTenbrunsel, Ann'
Date: 30 September 2015
Date Type: Publication
Defense Date: 28 May 2015
Approval Date: 30 September 2015
Submission Date: 29 June 2015
Access Restriction: 1 year -- Restrict access to University of Pittsburgh for a period of 1 year.
Number of Pages: 83
Institution: University of Pittsburgh
Schools and Programs: College of Business Administration > Accounting
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: Auditor, Ethical Decision Making, Blindspot, Behavioral Ethics
Date Deposited: 30 Sep 2015 14:33
Last Modified: 15 Nov 2016 14:29


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