Auditors’ Levels of Dispositional Need for Closure and Effects on Hypothesis Generation and Confidence

Posted: 10 Jan 2006 Last revised: 10 Dec 2012

See all articles by Charles D. Bailey

Charles D. Bailey

James Madison University

Cynthia M. Daily

University of Arkansas

Thomas J. Phillips

Louisiana Tech University

Date Written: September 10, 2010

Abstract

Dispositional Need for Closure (DNFC; Webster and Kruglanski 1994) concerns the propensity to seek and process information before reaching a judgment. Psychology researchers have demonstrated consistent effects on hypothesis generation and confidence in lay-judgment settings. Although psychology literature, in a validation sample, identifies accounting students as a group high in DNFC, we find professional auditors significantly lower in DNFC than reported in their sample of accounting students, and progressively lower in DNFC at higher professional ranks. Yet, substantial variance in this critical characteristic persists even at higher ranks, to potentially affect judgment. Since findings concerning lay decision makers are not always applicable to accounting professionals, we investigate the effects of DNFC on the hypothesis generation and confidence of experienced auditors. Auditors higher in DNFC generate fewer, lowerquality hypotheses, yet express greater confidence in their hypothesis set. Broader implications are discussed.

Keywords: Need for Closure, Audit Judgment, individual differences

Suggested Citation

Bailey, Charles D. and Daily, Cynthia M. and Phillips, Thomas J., Auditors’ Levels of Dispositional Need for Closure and Effects on Hypothesis Generation and Confidence (September 10, 2010). Behavioral Research in Accounting, Vol. 23, No. 2, 2011. Available at SSRN: https://ssrn.com/abstract=874989 or http://dx.doi.org/10.2139/ssrn.874989

Charles D. Bailey (Contact Author)

James Madison University ( email )

Harrisonburg, VA 22807
United States
901 484-0867 (Phone)

Cynthia M. Daily

University of Arkansas ( email )

Fayetteville, AR 72701
United States

Thomas J. Phillips

Louisiana Tech University ( email )

P.O. Box 3178
Ruston, LA 71272
United States
(318) 257-2822 (Phone)
(318) 257-4253 (Fax)

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