Accounting Webinar (2020-12)

Topic: Enhancing Auditors’ Reliance on Data Analytics Using Mindset

Speaker:Hun-Tong Tan
，Nanyang Technological University

Time: Wednesday, Oct 14^th, 11:00-12:30

Place: Microsoft Teams

Abstract:

Audit firms have invested significantly in data analytics (DA). However, evidence shows that auditors are often reluctant to rely on DA. One of auditors’ concerns is that inspectors will second-guess the audit evidence gathered using DA. Drawing on psychology research, we examine how a fixed mindset (a belief that one’s ability is fixed) versus a growth mindset (a belief that one’s ability is malleable) alters auditors’ reliance on DA. In an experiment with Big Four auditors as participants, we find that a growth-mindset prompt, but not a fixed-mindset prompt, enhances auditors’ reliance on DA as inspection risk increases. Our mediation analysis demonstrates that the growth-mindset prompt increases learning-related thoughts and reduces challenges-related thoughts as inspection risk increases. Our findings contribute to auditing literature on DA, innovative audit procedures, and mindsets, and have implications for auditors, audit firms, and regulators.

Introduction:

Professor Tan Hun Tong is the United Overseas Bank Chair and Professor of Accounting. His research interest focuses on understanding the judgment and decision making processes of preparers, users, and financial intermediaries of accounting information, and how institutional and environmental features influence such judgments and decisions. His work is characterized by the use of psychological theories and experimentation to gain insights into fundamental accounting issues.

He is currently editor of Accounting, Organizations and Society, and was former Associate Editor of Contemporary Accounting Research and Auditing: A Journal of Practice & Theory. He has served on various AAA committees, including the AAA Council, the AAA’s Notable Contributions to Accounting Literature Award Screening Committee, Auditing Section’s Research Committee, Research Advisory Committee, and the Notable Contribution to Auditing Literature Committee.

Hun-Tong has published in leading accounting journals such as The Accounting Review, Journal of Accounting Research, Contemporary Accounting Research, Accounting, Organizations and Society, and Auditing: A Journal of Practice & Theory, as well as major psychology journals such as Organizational Behavior and Human Decision Processes and Journal of Behavioral Decision Making. He serves on the editorial boards of The Accounting Review, Behavioral Research in Accounting, Contemporary Accounting Research, European Accounting Review, International Journal of Accounting, and Journal of Behavioral Decision Making.

https://research.ntu.edu.sg/expertise/academicprofile/Pages/StaffProfile.aspx?ST_EMAILID=AHTTAN

Your participation is warmly welcomed!