Jace Garrett and Dr. Doug Prawitt, Accounting

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.

My responsibility on the project was to research the accounting literature in this area to be sure that our idea hadn’t been published by somebody else already. After verifying that, I proceeded to read research on fraud and auditor judgment and decision making in order to come up with some other factors that might interact with fraud risk to affect auditors’ judgments, such as management’s integrity, the auditor’s level of professional skepticism, etc. These needed to be factors that we could manipulate or measure in an experimental setting. Once I felt like I had gained a good understanding of the background literature and potential factors, I met with my mentor to discuss them. This process took a lot longer than I had anticipated, as each time I met with my mentor we would have some good ideas, but also come up with other potential factors that I had not considered and that I had not researched. We went through several iterations of this process before finally settling on the variables we thought would be most interesting.

Once we had our variables of interest, we needed to design an instrument for our experiment. I searched for previously used instruments that we could use as a basis for our study, and we decided on one of them to use. I had to modify the instrument in order to add the extra variables we wanted to test. We went through several iterations of adding things to the instrument and evaluating it. We got IRB approval, but we were having difficulty finding participants for the study, since we wanted to use professionals and they are harder to find. Unfortunately, in the end we decided that this particular instrument would take too long for participants to complete and was more complex than we needed. I am currently in the process of designing a new instrument that will be more suitable for professionals, given their time constraints.

Once we finish designing the new instrument, we will again seek IRB approval and find participants for the study. We have an opportunity to run the experiment next summer, but we are hoping to find an opportunity sooner than that. If we can run the experiment in the next few months, I will prepare a first draft of the research paper to present to the accounting faculty and PhD-prep students in one of the weekly workshops. That will be another experience that will prepare me for my future career. After revising the paper based on comments from our peers, we will submit it for publication to an academic journal.

While I would have liked to finish the project by the end of this year, I think this experience gave me an idea of what the research process is really like in accounting. Projects are rarely completed in a single year, with papers averaging about 4 years from inception to publication. That being said, I had the gained experience in the development of research ideas, review of relevant literature, hypothesis development, and research design. Since I plan on pursuing a PhD in accounting, these skills are crucial to a successful career in academia. Prior to this project, I had a little experience in the development of research questions and reviewing prior research, but I had never gone so in depth in either process and I had never designed an experiment. This project also gave me the opportunity to really take charge of a project instead of only completing assignments my teachers have given me.