THE INVISIBLE FRAUD: THE IMPACT OF INATTENTIONAL BLINDNESS ON AUDITOR FRAUD DETECTION

Evidence gathered from major fraud investigations over the last decade has revealed that auditors in these cases failed to attend to fraud red flags within the substantive testing evidence. Research in psychology regarding inattentional blindness (IB) provides a theoretical framework for explaining why auditors may be prone to missing fraud red flags. This study examines the presence of IB during the performance of substantive testing and proposes two distinct interventions. Each intervention is predicted to improve auditor fraud detection. In a scenario involving fraudulent revenue transactions, findings show that a slight modification to the standard audit procedures significantly improves an auditor’s detection of red flags indicative of fraud. A second intervention involving the performance of a strategic reasoning task did not yield significant results. Overall, the results suggest that audit firms should consider making a cost effective adjustment to their standard audit program to improve fraud detection.

Name thesis:degree_name

Doctor of Philosophy

Level thesis:degree_level

Campus Only Dissertation

Discipline thesis:degree_discipline

Business Administration

Year

2016

Author dc:creator

• Edmonds, Mark Allen

Contributors dc:contributor

• O'Donnell, Ed

• Auditor
• Fraud
• Inattentional Blindness
• Priming
• Strategic Reasoning

Repository record dc:identifier

https://opensiuc.lib.siu.edu/dissertations/1153

OAI identifier oai:identifier

oai:opensiuc.lib.siu.edu:dissertations-2157