FARview #34: Thinking outside the box: Auditors' innovation mindset & auditors' fraud procedures

11 November 2024

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.

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/

This podcast is also available via Soundcloud: https://soundcloud.com/auditingresearch/thinking-outside-of-the-box/s-37HF0pS6Ls4?si=3bc06964a7c84e39bc6ef759fcf15a11&utm_source=clipboard&utm_medium=text&utm_campaign=social_sharing