In this FAR podcast Sara Bibler (Vrije Universiteit Amsterdam) talks about the purpose, findings and takeaways of the study ‘Thinking Outside of the Box: Engaging Auditors’ Innovation Mindset to Improve Auditors’ Fraud Procedures’ (co-authored by Margaret Christ, Tina Carpenter, and Anna Gold).

Auditors face complex challenges, for example in fraud detection, where creative thinking is essential. Building on the creativity literature, the research team studied whether an ‘innovation mindset’ leads to more effective fraud procedures. Furthermore, because regulatory bodies have expressed concerns that focusing on client insights might detract from audit quality, this study also examined whether these concerns are justified.

Key findings:

Auditors prompted to adopt an innovative mindset identified more effective fraud detection procedures, improving audit quality without any reduction in efficiency. Importantly, the goal of providing client insights did not diminish audit quality and could coexist with fraud detection goals without negative effects.

The video can also be found on Youtube: https://www.youtube.com/watch?v=rS0BsOX4rps

More information about the FAR research of the team can be found on the FAR website: https://foundationforauditingresearch.org/en/research-publications/projects/2019b02-engaging-auditorsa-innovation-mindset-to-improve-fraud-detection-with-data-analytics-prof-dr-gold/