The impact of groups and decision aid reliance on fraud risk assessment

Abstract

PurposeThe purpose of this paper is to investigate how the brainstorming component of Statement of Auditing Standards (SAS) No. 99 influences decision aid use and reliance, and the effectiveness of fraud risk assessment.Design/methodology/approachThe research framework links the influences of the fraud assessment setting and decision aid reliance. The hypotheses are tested in an experiment with two manipulated factors: setting (group or individual) and decision aid (provided or not provided).FindingsThe results of the study provide insight on how the brainstorming impacts fraud risk assessment, decision aid use and decision aid reliance. The results show that groups using a decision aid with fraud risk factors demonstrate superior decision quality and effectiveness even with lower decision aid reliance.Research limitations/implicationsThe influence of the setting (group or individual) on the fraud evaluation and detection is highlighted.Practical implicationsThis paper will be informative for auditors and firms involved in designing an efficient and effective fraud risk assessment.Originality/valueThis paper integrates the fraud risk assessment and decision aid literature to evaluate decision quality and effectiveness of group fraud risk assessment.