Using the Unconscious to Improve Detection of Managerial Deception

51 Pages Posted: 15 Jan 2018 Last revised: 3 Jun 2021

See all articles by Kristina M. Rennekamp

Kristina M. Rennekamp

SC Johnson Graduate School of Business; Cornell SC Johnson College of Business; Cornell University - Department of Accounting

Kathy Rupar

Georgia Institute of Technology

Nicholas Seybert

University of Maryland - Department of Accounting & Information Assurance

Date Written: June 8, 2020

Abstract

Prior research finds that individuals struggle to detect deception at rates better than chance, and that this extends to accounting settings where users evaluate the veracity of management’s claims. However, these findings relate to settings where individuals make conscious judgments about whether they are observing a liar or truth-teller. Recent research suggests that detection of deception may be improved when individuals make unconscious judgments. We predict and find that (1) unconscious judgments reflect more activation of deception concepts following a deceptive conference call (compared to a setting without deception), (2) unconscious judgments improve detection of deception compared to conscious judgments, and (3) a period of unconscious thought prior to a conscious judgment about the veracity of management claims improves the accuracy of that judgment following a deceptive call. Combined, our results suggest a useful approach to analysts, auditors, and others who wish to improve their ability to detect managerial deception.

Keywords: unconscious thought, conscious judgment, deception detection, lexical decision task, implicit association test, managerial deception

JEL Classification: M40, M41

Suggested Citation

Rennekamp, Kristina M. and Rupar, Kathy and Seybert, Nicholas, Using the Unconscious to Improve Detection of Managerial Deception (June 8, 2020). Available at SSRN: https://ssrn.com/abstract=3100299 or http://dx.doi.org/10.2139/ssrn.3100299

Kristina M. Rennekamp (Contact Author)

SC Johnson Graduate School of Business ( email )

Ithaca, NY 14853
United States
607-255-0500 (Phone)

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

Cornell University - Department of Accounting ( email )

401P - Sage Hall
Cornell University
Ithaca, NY 14853
United States
607-255-0500 (Phone)

Kathy Rupar

Georgia Institute of Technology ( email )

800 W Peachtree St NW
Suite 445
Atlanta, GA 30308-1149
United States
4043855713 (Phone)

Nicholas Seybert

University of Maryland - Department of Accounting & Information Assurance ( email )

Robert H. Smith School of Business
College Park, MD 20742-9157
United States

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