Department

School of Accountancy

Document Type

Article

Publication Date

2018

Embargo Period

7-18-2018

Abstract

This paper examines whether auditors’ affect toward client management influences fraud likelihood judgments and whether accountability and experience with fraud risk judgments moderate this effect. This research also explores the process by which affect influences fraud judgments by examining affect’s influence on the evaluation of fraud evidence cues. Results indicate that more positive affect toward the client results in lower fraud likelihood judgments. Accountability is found to moderate this effect, but only for experienced auditors. These findings have implications for fraud brainstorming sessions where all staff levels provide input into fraud risk assessments and because client characteristics are especially salient during these assessments. Importantly, results also support the proposition that affect impacts inexperienced auditors’ fraud assessments through errant attribution of client likeability to evidence cues that refer to management, rather than biasing all client-related evaluations. Together, these findings suggest that education and training can be improved to better differentiate relevant and irrelevant cues in fraud judgment.

Journal Title

Advances in Accounting Behavioral Research

Journal ISSN

1475-1488

Comments

Preprint.

Included in

Accounting Commons

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