TY - JOUR A1 - Ewelt-Knauer, Corinna A1 - Schwering, Anja A1 - Winkelmann, Sandra T1 - Probabilistic audits and misreporting T2 - European accounting review N2 - We investigate how the design of audit processes influences employees’ reporting decisions. We focus specifically on detective employee audits for which several employees are randomly selected after a defined period to audit their ex-post behavior. We investigate two design features of the audit process, namely, employee anonymity and process transparency, and analyze their impact on misreporting. Overall, we find that both components influence the extent of individuals’ misreporting. A nonanonymous audit decreases performance misreporting more than an audit in which the employee remains anonymous. Furthermore, the high incidence of performance misreporting in the case of anonymous audits can be decreased when the process transparency is low. Thus, our study informs accountants about how the two design features of employee anonymity and transparency of the audit process can be used to constrain performance misreporting to increase the efficiency of audits KW - Performance misreporting KW - Employee audits KW - Employee anonymity KW - Process KW - transparency Y1 - 2021 UR - https://publishup.uni-potsdam.de/frontdoor/index/index/docId/55676 SN - 1468-4497 SN - 0963-8180 VL - 30 IS - 5 SP - 989 EP - 1012 PB - Routledge CY - London ER -