Auditors’ self-perceived abilities in conducting domain audits

Vincent Owhoso and Andrea Weickgenannt

CRITICAL PERSPECTIVES ON ACCOUNTING, 2009, vol. 20, issue 1, 3-21

Abstract: This study investigates the extent to which auditors’ ratings of self-perceived abilities correspond with their actual performance, and whether these perceptions are influenced by audit experience and effectiveness when conducting audits within their domain of specialization. One hundred forty-four (144) industry-specialized audit seniors and managers reviewed two sets of audit working paper cases, one in banking and one in healthcare. At the end of the review, the auditors rated their ability to perform an audit in their domain. The analysis of these ratings shows that auditors significantly inflated their perceived abilities relative to actual performance. The results indicate that differences in auditor rank are insignificant in terms of this propensity to overestimate self-perceived abilities relative to actual performance; however, above median effective auditors are far less overconfident than below median effective auditors. These results have implications for the audit profession in terms of training, assignments, performance evaluation, and the use of decision aids to mitigate the propensity toward overconfidence.

Keywords: Self-perceived ability; Confidence; Review process; Risk reduction; Error detection; Ability; Audit performance; Auditor perceptions; Auditor overconfidence; Domain audits (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:crpeac:v:20:y:2009:i:1:p:3-21

DOI: 10.1016/j.cpa.2007.04.005

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