Procedural instrumentality and audit group judgment: An exploration of the impact of cognitive fallibility and ability differences

Gary Kleinman, Dan Palmon

Research output: Contribution to journalArticle

2 Scopus citations

Abstract

The issue of auditor judgment prowess and resultant decision-making success has been an important topic in the behavioral auditing area for many years and has generated a voluminous research literature. However, relatively little literature exists on how differences in individual group member cognitive heuristics (fallibility) and ability impact the group process, and are impacted upon by the group process. This issue is important since so much of audit firm decision-making has its origins in audit group deliberations (Hunton 2001). Accordingly, understanding circumstances that give rise to either more flawed ('process losses'), or better ('process gains'), group decision-making outcomes are important even though the literature generally recognizes the superiority of group over individual decision-making (e.g., Rich et al. 1997). The model developed here is intended to develop a better understanding of cognitive factors that impact positively or negatively on audit group process. We then develop a four stage model of group decision-making, during which the differing assets and liabilities (cognitive, ability, expertise) of audit group members are combined. The four stages are diversity, controvery, insight and resolution. These are then described at length.

Original languageEnglish
Pages (from-to)147-168
Number of pages22
JournalGroup Decision and Negotiation
Volume18
Issue number2
DOIs
StatePublished - 1 Mar 2009

Keywords

  • Auditing
  • Auditor-client relationships
  • Cognitive heuristics
  • Diversity
  • Group decision-making

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