Does Brainstorming of Auditees Fraud Prevention System Reduce Junior's Auditor Judgment Bias? Evidence from an Experimental Study

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Abstract

This study aims to investigate whether brainstorming of the auditee’s fraud prevention system before an audit process is associated with the auditor’s judgment bias on risk assessment of material misstatement. Generally, this research proposes that the brainstorming reduces the auditor’s judgment bias. Using 132 college students of accounting at 17 universities in West Java, Indonesia, as research participants, this study conducts an experimental research method to test the proposition. The results suggest that after the brainstorming process, auditors who conduct an audit assignment to the company with a bad fraud prevention system assess a higher risk of material misstatement compared to the auditors before doing brainstorming. This means that the brainstorming process helps auditors to analyse audit evidence associated with the possibility of fraud and its effect on risk of material misstatement. Therefore, brainstorming facilitates the learning process for an auditor to improve the accuracy of judgment regarding the risk of material misstatement.
Original languageEnglish
Pages (from-to)704-717
JournalInternational Journal of Innovation, Creativity and Change
Volume12
Issue number4
Publication statusPublished - 2020

Keywords

  • Brainstorming
  • Fraud Prevention System
  • and the Risk of Material Misstatement
  • auditor’s judgment bias

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