Auditors experience significant problems auditing complex accounting estimates, and this increasingly puts financial reporting quality at risk. Based on analyses of the specific errors that auditors commit, we propose that auditors need to be able to think more broadly and incorporate...

We develop a framework for improving auditor judgment in complex audit tasks. The framework recognizes that high-quality judgment in complex tasks requires that auditors (1) possess the knowledge needed for the task, (2) recognize the need for analytical (versus heuristic) processing, and (3)...

: Regulators and researchers provide evidence that auditors’ judgment quality is problematic in complex audit tasks. We introduce a framework for improving auditor judgment in these tasks. The framework builds on dual-process theory to recognize that high-quality judgment in complex tasks...

We interview 24 very experienced auditors about how they audit complex accounting estimates such as fair values and impairments and what problems they experience in the process. We find that auditors overwhelmingly choose to audit the details of management's estimate rather than use other...

Auditors frequently use valuation specialists to help them improve the quality of audits of fair values, but problems related to specialists' involvement suggest specialists do not always improve audit quality. I interviewed 28 audit partners and managers with extensive experience using...

Auditors frequently use valuation specialists to help them evaluate fair values, but problems related to specialists' involvement suggest the potential benefits of specialists' involvement are under-realized. I interviewed 28 auditors and 14 valuation specialists to investigate how auditors use...

Financial reporting quality can benefit from companies and auditors using artificial intelligence (AI) in complex and subjective financial reporting areas. However, this will only happen if managers incorporate AI-based information into their financial reporting decisions, which the popular...

Firms' efforts to mitigate greenhouse gas emissions and curb climate change has recently become a significant area of concern to investors. We examine how management's focus on mitigating its direct versus indirect emissions influences a firm's ability to attract capital from investors, and how...

This study investigates how formal control systems and the behavior of peers influence behavior in accounting settings. We manipulate formal controls and peer behavior (social norms) in a laboratory experiment, allowing us to precisely investigate the interactive effect of these two factors on...

Prior archival research documents a positive association between managers' socially responsible actions and their ethical behavior in other domains and typically attributes this association to firm- and manager-level fixed effects. Using an experiment, we provide evidence about a new mechanism...