Margaret Christ

Professor

Margaret H. Christ is the J.M. Tull Chair in Accounting and Director of the J.M. Tull School of Accounting at the Terry College of Business, University of Georgia. She earned her Ph.D. from the University of Texas at Austin and her undergraduate degree from Louisiana State University. Her research focuses on management control systems, incentive compensation, internal audit practices, and the use of data analytics in accounting. She has published in leading journals such as The Accounting Review, Contemporary Accounting Research, and Accounting, Organizations and Society. Margaret serves as an editor for The Accounting Review and Accounting Horizons and sits on multiple editorial boards. She has received numerous awards from the American Accounting Association and has contributed to revisions of the COSO Internal Control Integrated Framework. Her teaching emphasizes accounting analytics and data visualization, and she has co-developed award-winning educational cases in collaboration with the EY Academic Resource Center.

Engaging auditors’ innovation mindset to mitigate goal conflict and improve audit effectiveness with data analytics – thinking outside of the box
The paper explores how engaging auditors’ innovation mindset can improve audit effectiveness when using data analytics, particularly in fraud detection. It addresses two key challenges:
  1. Goal conflict: auditors are increasingly expected to provide client insights alongside ensuring audit quality, which can reduce performance on primary audit tasks.
  2. Cognitive flexibility: essential for interpreting complex data analytics outputs and maintaining professional skepticism.
The authors propose that priming an innovation mindset enhances cognitive flexibility, enabling auditors to manage competing goals and improve judgment quality. They design an experimental study to test whether creativity prompts mitigate negative effects of goal conflict and lead to better fraud risk assessments and audit procedures. Key contributions:
  • Highlights risks of conflicting goals in audits using data analytics.
  • Suggests creativity interventions to strengthen auditors’ professional skepticism.
  • Provides insights for regulators and firms on fostering innovation to improve audit quality.
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Thinking Outside of the Box: Engaging Auditors’ Innovation Mindset to Improve Auditors’ Fraud Actions in a Data-Analytic Environment
Data analytics can help auditors effectively respond to the risk of material misstatement due to fraud. However, harnessing this potential may require auditors to adopt an innovation mindset as urged by firms and regulators. Innovation is defined as creativity in action. Building on the creativity literature, we develop an innovation mindset designed to improve auditors’ ability to generate effective fraud audit procedures when interpreting data analytic output. Further, with the advent of data analytics, auditors are asked to provide value-added, client insights, in addition to their primary goal of obtaining high audit quality. We predict that incorporating this secondary goal may strengthen the innovation mindset effect by enhancing auditors’ cognitive flexibility. We experimentally demonstrate that the innovation mindset significantly improves  auditors’ development of effective fraud procedures. Moreover, this effect is amplified when auditors generate client insights, as this intervening goal boosts creativity and cognitive flexibility, further enhancing auditors’ decision-making quality.
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Thinking Outside the Box: Engaging Auditors’ Innovation Mindset to Improve Auditors’ Fraud Judgments and Actions in a Data-Analytic Environment
Data analytics has become a prominent tool for audit firms, which exalt its capabilities to promote audit quality. However, whether auditors have the appropriate mindset to fully leverage the capabilities of data analytics is yet unclear. Further, as data analytics becomes more prevalent in audit engagements, auditors are encouraged to also use this technology to provide client insights. This use has sparked concern from regulators that this additional goal could negatively impact audit quality by shifting an auditors’ focus and/or impacting independence. This could happen as these goals may compete for the same cognitive resources and auditors face time constraints. In addition, the focus on providing insights could be viewed as an auditor operating in more of an advisory (non-audit) role. In this study, we seek to understand whether encouraging auditors to be creative by employing an innovation mindset and instructing them to identify clients’ insights, when using data analytics, has a meaningful positive? impact on audit quality. We examine this using an experiment in which audit quality means the ability to address seeded fraud in a hypothetical engagement. Our results indicate that encouraging auditors to be creative increases their cognitive flexibility, which results in better identification of effective audit procedures (i.e., procedures targeting fraud). In addition, when a creative prompt is paired with a new goal to provide client insights, auditor judgments improve even more. Finally, encouraging auditor creativity also appears to improve their identification of value-added client insights. We recommend that firms look at creativity as a tool to improve auditor judgments. We point out for those concerned about adding a goal to provide client insights that this goal may not have a negative impact and in some instances may even improve audit quality.  
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November 12, 2023

FAR research team wins EARNet Best Paper Award!

During the Earnet Symposium, held in Thessaloniki, Sara Bibler, CPA, Tina Carpenter, Margaret Christ and Anna Gold won the Best Paper Award with their paper ‘Thinking Outside of the Box: Engaging Auditors’ Innovation Mindset to Improve Auditors’ Fraud Actions in a Data-Analytic Environment’. Congratulations on this gr…
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