Motivating Auditor Skepticism

Auditors, like other decision makers, are motivated both intrinsically and extrinsically. We test whether reminding auditors of their intrinsic motivations for their work prompts them to engage in more skeptical decision behavior. We provide theory and evidence that prompting auditors’ intrinsic motivation improves their information processing strategies: intrinsically motivated auditors attend to a broader set of information cues, they process the cues at a deeper level, and they request more relevant additional audit evidence. These more desirable information processing behaviors lead auditors whose intrinsic motivation has been prompted to make more skeptical audit judgments about a biased fair value than their counterparts whose intrinsic motivation has not been prompted. Supplemental analyses show that intrinsically motivated auditors do not sacrifice efficiency for the increase in effectiveness. Analyses also show that while intrinsically motivated auditors identify more relevant cues and request more relevant information of several types, it is the cues that require higher levels of processing that drive the increase in skeptical judgment. Finally, we find that auditors prompted with either intrinsic or extrinsic motivation are more likely to take skeptical action, but only those prompted with intrinsic motivation obtain the evidence to support that skeptical action.

This seminar is organised by the Erasmus Accounting Research Group.