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

Author

Listed:
  • Christopher Koch

    (Johannes Gutenberg University Mainz)

  • Annette Koehler

    (University of Duisburg-Essen)

  • Kristina Yankova

    (University of Duisburg-Essen)

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.

Suggested Citation

  • Christopher Koch & Annette Koehler & Kristina Yankova, 2016. "Professional Skepticism and Auditor Judgment: Does Trait Skepticism Mitigate the Recency Bias?," Working Papers 1623, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 2016.
    • Handle: RePEc:jgu:wpaper:1623
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    References listed on IDEAS

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    Cited by:

    1. Rashid, Abdul & Ghazi, Muhammad Saarim, 2021. "Factors affecting Sharī‘ah audit quality in Islamic banking institutions of Pakistan: a theoretical framework," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 28, pages 124-140.

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