Title: Selective perception and group brainstorming: an investigation of auditors' fraud risk assessment

Authors: Naman Desai; Vishal Gupta

Addresses: Finance and Accounting Area, Indian Institute of Management, Vastrapur Road, Ahmedabad 380015, India ' Organizational Behavior Area, Indian Institute of Management, Vastrapur Road, Ahmedabad 380015, India

Abstract: The present study examines the impact of two important contextual variables: pressure on management and the available opportunity to indulge in unethical practices (i.e., commit fraud) on auditors' selective perceptions and fraud risk assessments. Prior research indicates both advantages as well as disadvantages of group decision-making. Therefore, the second aim of the study is to investigate if selective perceptions of individual auditors are exaggerated in group settings. The overall results of our experiments indicate that observed differences in individual decision-makers fraud risk assessments (in response to different levels of pressures and opportunities) were significantly accentuated when they performed group brainstorming. Our findings suggest that group brainstorming, instead of reducing the influence of contextual characteristics on selective perception, actually accentuates that effect. Implications for policy and practice are discussed.

Keywords: selective perception; attribution theory; group brainstorming; fraud detection; competitive pressures; fraud opportunities; fraud risk assessment; auditing; group decision making; auditor perceptions; management pressure.

DOI: 10.1504/IJBAF.2016.079875

International Journal of Behavioural Accounting and Finance, 2016 Vol.6 No.1, pp.1 - 25

Received: 01 Sep 2015
Accepted: 10 Mar 2016
Published online: 19 Oct 2016 *

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