Are Auditors Overconfident in Predicting the Knowledge of Other Auditors?
32 Pages Posted: 1 Apr 2007 Last revised: 11 Jun 2013
Date Written: March 30, 2007
We investigate factors that may influence auditors' overconfidence in other auditors' technical knowledge. We conducted an experiment using natural teams comprising audit seniors and managers. We find that audit managers' (seniors') overconfidence in audit seniors' (managers') technical knowledge is larger (smaller) for a high complexity task than for a low complexity task, for both individual and group predictions. These results indicate that overconfidence is influenced by task complexity, and that the effect differs between audit managers (who make downstream predictions of seniors' knowledge) and audit seniors (who make upstream predictions about managers' knowledge).
Keywords: overconfidence, technical knowledge, task complexity, auditor rank
JEL Classification: M49
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