Probabilistic Audits and Misreporting

  • 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
Metadaten
Author details:Corinna Ewelt-KnauerORCiDGND, Anja SchweringORCiDGND, Sandra WinkelmannORCiDGND
DOI:https://doi.org/10.1080/09638180.2021.1899014
ISSN:1468-4497
ISSN:0963-8180
Title of parent work (English):European Accounting Review
Subtitle (English):the Influence of Audit Process Design on Employee Behavior
Publisher:Routledge
Place of publishing:London
Publication type:Article
Language:English
Date of first publication:2021/03/22
Publication year:2021
Release date:2022/09/22
Volume:30
Issue:5
First page:989
Last Page:1012
Organizational units:Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften / Fachgruppe Betriebswirtschaftslehre
DDC classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
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