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Journal of Undergraduate Research

Keywords

fraud risk assessments, auditors, evidence evaluation

College

Marriott School of Management

Department

Accountancy

Abstract

My original project idea was to research how supervisors’ views affect subordinates’ judgments in an audit setting. While this was a good idea, my mentor and I came up with another research idea that seemed even more interesting. Since fraud has been a hot topic in accounting research, we thought our idea was particularly timely. The idea we had was to research the effect of preliminary fraud risk assessments on auditors’ evaluation of evidence. We believe that making the preliminary fraud risk assessments creates a bias when auditors later evaluate evidence. Specifically, we believe that when auditors assess the likelihood of fraud as low, they will be less likely to believe evidence is indicative of fraud. Auditing standards say that auditors should always be objective in their evaluations of evidence, regardless of prior knowledge or experience, so this bias would indicate that auditors are not following the standards.

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