Improving Experienced Auditors' Detection of Deception in CEO Narratives

• 成果类型: Article
• 署名作者: Hobson, Jessen L.; Mayew, William J.; Peecher, Mark E.; Venkatachalam, Mohan
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; Duke University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12181
• 发表日期: 2017
• 页码: 1137-1166
• 关键词: professional skepticism; CONFERENCE CALLS; fee pressure; base-rate; FRAUD; accuracy; insights; RISK

摘要

We experimentally study the deception detection capabilities of experienced auditors, using CEO narratives from earnings conference calls as case materials. We randomly assign narratives of fraud and nonfraud companies to auditors as well as the presence versus absence of an instruction explaining that cognitive dissonance in speech is helpful for detecting deception. We predict this instruction will weaken auditors' learned tendency to overlook fraud cues. We find that auditors' deception judgments are less accurate for fraud companies than for nonfraud companies, unless they receive this instruction. We also find that instructed auditors more extensively describe red flags for fraud companies and more accurately identify specific sentences in narratives that pertain to underlying frauds. These findings indicate that instructing experienced auditors to be alert for cognitive dissonance in CEO narratives can activate deception detection capabilities.