Do Fine Feathers Make a Fine Bird? The Influence of Attractiveness on Fraud‐Risk Judgments by Internal Auditors

13 Pages Posted: 23 Oct 2018

See all articles by Marc Eulerich

Marc Eulerich

University of Duisburg-Essen, Mercator School of Management

Jochen C. Theis

University of Duisburg-Essen

Junpeng Lao

University of Fribourg, Department of Psychology

Meike Ramon

University of Fribourg

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Date Written: November 2018

Abstract

Independence and objectivity are key principles assumed to underlie internal auditors' fraud‐risk judgments. However, a substantial body of evidence suggests that physical attractiveness of suspects may influence internal auditors' fraud‐risk judgments. In this experimental study we investigated whether internal auditors are susceptible to appearance‐related biases, or whether they correct for them due to their expertise and motivation. A total of 193 internal auditors were presented a misappropriation‐of‐assets scenario in which the attractiveness of a suspect was manipulated. To determine whether professional expertise is associated with increased resilience to appearance‐related biases, their fraud‐risk judgments were contrasted with those acquired from 240 subjects without auditing experience (“naive subjects”). In line with our predictions, attractiveness modulated naive subjects' fraud‐risk judgments, whereas internal auditors did not show any indication for appearance‐related biases. Our findings suggest that internal auditors' experience and motivation may immunize them to the phenomena of physical attractiveness stereotyping and the attractiveness halo effect.

Keywords: audit failure, ethics, fraud, internal audit, professionalism

Suggested Citation

Eulerich, Marc and Theis, Jochen C. and Lao, Junpeng and Ramon, Meike, Do Fine Feathers Make a Fine Bird? The Influence of Attractiveness on Fraud‐Risk Judgments by Internal Auditors (November 2018). International Journal of Auditing, Vol. 22, Issue 3, pp. 332-344, 2018, Available at SSRN: https://ssrn.com/abstract=3271236 or http://dx.doi.org/10.1111/ijau.12137

Marc Eulerich (Contact Author)

University of Duisburg-Essen, Mercator School of Management ( email )

Lotharstrasse 65
Duisburg, 47057
Germany
00492033792600 (Phone)

HOME PAGE: http://www.msm.uni-due.de/ircg

Jochen C. Theis

University of Duisburg-Essen

Lotharstrasse 1
Duisburg, 47048
Germany

Junpeng Lao

University of Fribourg, Department of Psychology ( email )

Avenue de l'Europe 20
CH-1700 Fribourg
Switzerland

Meike Ramon

University of Fribourg ( email )

Avenue de l'Europe 20
CH-1700 Fribourg
Switzerland

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