Date of Award
Daniels College of Business
Lisa M. Victoravich
Alisa G. Brink
Behavioral accounting, Dilution effect, Experiment, Internal audit, Representativeness
Internal auditors assigned to assess internal controls over financial reporting incorporate irrelevant information into their judgment, showing decreased skepticism when irrelevant information contradicts preconceived stereotypes of management, known as the dilution effect and attributed to the representativeness heuristic. Irrelevant information consistent with preconceived stereotypes does not decrease skepticism. In this experiment practicing internal auditors are provided an irrelevant description of the Chief Information Officer portrayed as either gregarious or introverted then subsequently receive relevant internal controls information. When the Chief Information Officer is described as gregarious, counter to common stereotypes, internal auditors assess risk as less likely to occur compared to when the Chief Information Officer is described as introverted or when no personality information is provided. This study controls for individual differences in trait skepticism, perception of information relevance, and CIO warmth finding that the effect of irrelevant information on skeptical judgment is stable regardless of internal auditor experience, gender, and presence of a professional certification. These findings provide insight into how internal auditors incorporate information into a risk decision indicating that irrelevant information has a significant role in skeptical judgment.
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Joseph Anthony Giordano
Received from ProQuest
Giordano, Joseph Anthony, "The Effect of Nondiagnostic Information on Internal Auditor Skepticism: Capturing the Dilution Effect" (2023). Electronic Theses and Dissertations. 2178.