A recently published research paper notes that “Auditors
experience significant problems auditing complex accounting estimates and this
increasingly puts financial reporting quality at risk. Based on analyses of the
specific errors that auditors commit, we propose that auditors need to be able
to think more broadly and incorporate information from a variety of sources in
order to improve audit quality for these important accounts.”
The research tries to experimentally demonstrate that a
deliberative mindset intervention improves auditors’ ability to identify
unreasonable estimates by improving their ability to identify and incorporate
into their analyses contradictory information from diverse parts of the audit
and improving their ability to think critically about the evidence. Additional
analyses are performed to demonstrate that such intervention improves auditor
performance by causing them to think differently, rather than simply to work
harder.
The paper demonstrates that critical thinking can improve
the identification of unreasonable estimates and, in doing so, provide new directions
for addressing audit quality issues. For more information, refer to the article
“Auditor
Mindsets and Audits of Complex Estimates” by Emily E. Griffith, Jacqueline
S. Hammersley, Kathryn Kadous and Donald Young in the Journal
of Accounting Research (Vol.
53, No. 1, March 2015).
