Are Auditors Overconfident in Predicting the Knowledge of Other Auditors?

32 Pages Posted: 1 Apr 2007 Last revised: 11 Jun 2013

See all articles by Jun Han

Jun Han

The University of Hong Kong

Karim Jamal

University of Alberta - Department of Accounting, Operations & Information Systems

Hun-Tong Tan

Nanyang Business School, Nanyang Technological University

Date Written: March 30, 2007

Abstract

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

Suggested Citation

Han, Jun and Jamal, Karim and Tan, Hun-Tong, Are Auditors Overconfident in Predicting the Knowledge of Other Auditors? (March 30, 2007). Auditing: A Journal of Practice & Theory, Vol. 30, No. 1, 2011, University of Alberta School of Business Research Paper No. 2013-698, Available at SSRN: https://ssrn.com/abstract=977362 or http://dx.doi.org/10.2139/ssrn.977362

Jun Han (Contact Author)

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China
852 22415846 (Phone)

Karim Jamal

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada
780-492-5829 (Phone)
780-492-3325 (Fax)

Hun-Tong Tan

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore
+65 6790 4819 (Phone)
+65 6793 7956 (Fax)

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