Auditing Practice and Cognitive Aging: Evidence from a Quasi-Experiment

42 Pages Posted: 28 Aug 2017 Last revised: 21 Apr 2021

See all articles by Leonardo Barcellos

Leonardo Barcellos

Emory University, Goizueta Business School, Students

Ricardo Lopes Cardoso

Brazilian School of Public and Business Administration; Rio de Janeiro State Univ., FAF

Rodrigo Leite

COPPEAD Graduate School of Business

Date Written: August 25, 2017

Abstract

We show that auditing practice is more likely to prevent cognitive reflection abilities (CR-abilities) decline than financial reports elaboration practice. We rely on the institutionally unique setting of the Brazilian accounting profession together with previous research and interviews to reason that, while auditors and preparers follow indistinguishable educational paths, auditors usually engage in more cognitively taxing tasks than preparers. We collect data from a large number of Brazilian CPAs and use a quasi-experimental approach to estimate the moderation effect of career on the relationship between aging and CR-abilities. We find that CR-abilities do not differ at early career stages, but preparers’ CR-abilities decline across aging, whereas auditors’ CR-abilities are preserved. We cluster CPAs by age subgroups and compare auditors and preparers who are very similar across several personal and professional individual characteristics but career. This approach overcomes some of the pitfalls of previous studies, strengthening causal inferences.

Keywords: auditing practice; cognitive aging; cognitive reflection ability; certified public accountants

JEL Classification: M41, M42, M49

Suggested Citation

Barcellos, Leonardo and Cardoso, Ricardo Lopes and Leite, Rodrigo, Auditing Practice and Cognitive Aging: Evidence from a Quasi-Experiment (August 25, 2017). Available at SSRN: https://ssrn.com/abstract=3026189 or http://dx.doi.org/10.2139/ssrn.3026189

Leonardo Barcellos (Contact Author)

Emory University, Goizueta Business School, Students ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Ricardo Lopes Cardoso

Brazilian School of Public and Business Administration ( email )

Rua Jornalista Orlando Dantas, 30
Office 206. Botafogo
Rio de Janeiro, Rio de Janeiro 22231-010
Brazil
+55-21 30832713 (Phone)

Rio de Janeiro State Univ., FAF ( email )

Rua Sao Francisco Xavier, 524
bloco B, sala 1024
Rio de Janeiro, Rio de Janeiro
Brazil

Rodrigo Leite

COPPEAD Graduate School of Business ( email )

Rua Pascoal Lemme
355 - Cidade Universitária
Rio de Janeiro, Rio de Janeiro 21941-918
Brazil

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