Professional Skepticism and Auditor Cognitive Performance in a Hypothesis Testing Task

40 Pages Posted: 2 Jul 2013

Date Written: July 1, 2013

Abstract

The study examines the joint effects of two different types of state skepticism prompts, as well as the effect of the personality trait of professional skepticism, on auditor cognitive performance in a hypothesis-testing task. Seventy-eight audit students and 85 practicing auditors examine an audit case and determine the evidence needed to test the validity of a management’s assertion in a Wason selection task (Wason 1966, 1968, 1969; Cosmides 1989). The 2x2 between-participants experiment manipulates the presence of a professional skepticism prompt and the presence of a cheater-detection prompt (Cosmides 1989; Cosmides and Tooby 2008a). The personality trait of professional skepticism is measured with Hurtt’s (2010) scale. The presence of a professional skepticism prompt is found to improve cognitive performance in the sample of students, but not in the sample of auditors. The presence of a cheater-detection prompt has no significant effect on performance in the student or auditor sample. The personality trait of professional skepticism is a significant predictor of cognitive performance in the sample of students but not in the sample of auditors. These findings suggest that increasing the states of skepticism or suspicion toward the client firm’s management may have no incremental effect on the normative hypothesis testing performance of experienced auditors, who are consistently exposed to the importance of being skeptical in the course of their work. However, actively encouraging skeptical mindsets in novice auditors is likely to improve their cognitive performance in hypothesis testing tasks.

Keywords: professional skepticism, auditor performance, hypothesis testing, evidence selection, social contracts

JEL Classification: M40

Suggested Citation

Peytcheva, Marietta, Professional Skepticism and Auditor Cognitive Performance in a Hypothesis Testing Task (July 1, 2013). Available at SSRN: https://ssrn.com/abstract=2288039 or http://dx.doi.org/10.2139/ssrn.2288039

Marietta Peytcheva (Contact Author)

Lehigh University ( email )

621 Taylor Street
Bethlehem, PA 18015
United States
610 758 2818 (Phone)
610 758 5992 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
327
Abstract Views
1,868
rank
90,602
PlumX Metrics