Professional Skepticism and Auditor Judgment: Does Trait Skepticism Mitigate the Recency Bias?

42 Pages Posted: 7 Dec 2016

See all articles by Christopher Koch

Christopher Koch

Johannes Gutenberg University Mainz - Gutenberg School of Economics and Management

Annette Köhler

University of Duisburg-Essen

Kristina Yankova

University of Duisburg-Essen - Mercator School of Management

Date Written: December 2016

Abstract

In two experiments with experienced auditors, we examine whether and how trait skepticism mitigates the tendency to place a greater emphasis on the most recently presented information, the so-called recency bias. We measure trait skepticism using the Hurtt scale (Hurtt 2010), manipulate information order, and vary presentation mode across two experiments. When information is presented sequentially (experiment 1), we find that auditors who score higher on the subconstructs of trait skepticism related to evidence examination are less likely to overweight contrasting evidence and thus are less prone to the recency bias. When information is presented simultaneously and the task is complex (experiment 2), we observe that auditors with higher trait skepticism exhibit higher cognitive effort which mitigates the recency bias. Our main contribution is the identification and detailed investigation of trait skepticism as a factor mitigating the recency bias, thereby providing evidence for its behavioral manifestation.

Keywords: Professional Skepticism, Trait Skepticism, Auditor Judgment, Recency

JEL Classification: M42

Suggested Citation

Koch, Christopher and Köhler, Annette and Yankova, Kristina, Professional Skepticism and Auditor Judgment: Does Trait Skepticism Mitigate the Recency Bias? (December 2016). Available at SSRN: https://ssrn.com/abstract=2880653 or http://dx.doi.org/10.2139/ssrn.2880653

Christopher Koch (Contact Author)

Johannes Gutenberg University Mainz - Gutenberg School of Economics and Management ( email )

Mainz
Germany
+49 (6131) 3929990 (Phone)

HOME PAGE: http://https://www.cg.bwl.uni-mainz.de/

Annette Köhler

University of Duisburg-Essen ( email )

Lotharstrasse 65
Duisburg, 47057
Germany

Kristina Yankova

University of Duisburg-Essen - Mercator School of Management ( email )

Lotharstraße 65
Duisburg, Nordrhein-Westfalen 47057
Germany

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