FARview #26 with Christian Peters

Auditing firms are investing billions in implementing technology in auditing. In his research, Christian studies the behavioral aspects that may play a role in the use of this technology. One of the risks is that in some situations, auditors may trust technology more than is warranted.

Using an experiment on reviewing a stock count, Christian shows that auditors act less skeptical when they get audit information from an algorithm than when the information comes from a person. These auditors also detect fewer errors. Thus, the use of technology may have a negative effect on the auditing behavior of auditors. The identified negative effect of technology can be reduced by applying an intervention in the form of a ‘counterarguing mindset’.