麻豆村

External auditors play a vital role in upholding the accuracy of financial reports. However, recent high-profile accounting scandals have raised concerns about their effectiveness, sparking questions about why auditors sometimes fail to flag financial discrepancies.

In a new study from researchers in the Tepper School of Business at 麻豆村 and the University of Denver, researchers examined whether two personality traits鈥攈onesty-humility and agreeableness鈥攊nfluence an auditor鈥檚 likelihood to report financial misstatements.

The study鈥檚 findings reveal that auditors with higher honesty-humility scores were more likely to prioritize professional integrity and report financial infractions, while those with lower scores did not. Agreeableness鈥攐ften associated with conflict avoidance and a desire for social harmony鈥攄id not reliably affect auditor reporting behavior, suggesting that this trait may not be as crucial for ensuring audit quality.

鈥淧ersonality traits can play a key role in identifying individuals who will communicate disagreement with clients and effectively uphold financial reporting standards,鈥� explained Taya Cohen, Professor of Organizational Behavior and Business Ethics at Carnegie Mellon鈥檚 Tepper School of Business (pictured to the right), who coauthored the study. 鈥淥ur findings show that screening auditors for honesty-humility could enhance monitoring quality and help prevent costly oversight failures.鈥�

The study explored the HEXACO model of personality, which identifies six dimensions of personality (honesty-humility, emotionality, extraversion, agreeableness, conscientiousness, and openness), across two experiments, one of which involved approximately 200 certified public accountants. HEXACO honesty-humility, characterized by fairness and modesty, was the only trait to consistently predict better monitoring quality.

鈥淕iven the critical role of auditors in preventing financial misreporting, these findings are very relevant,鈥� says Lily Morse, Assistant Professor of Management at the University of Denver鈥檚 Daniels College of Business, who led the study. Morse received her Ph.D. at the Tepper School of Business. 鈥淥rganizations should consider hiring auditors who display high levels of honesty-humility and provide interventions for those who could benefit from developing behaviors characteristic of this trait.鈥�

While the study provides valuable insights, the authors recommend further research to test their findings across different types of auditing environments and with varied measures of auditor fraud detection.

The research was funded by the Deloitte Center for Ethical Leadership at the University of Notre Dame and the Center for Behavioral and Decision Research at 麻豆村.

Summarized from an article in , Predicting Monitoring Failures Using the HEXACO Framework: The Effects of Honesty-Humility and Agreeableness, by Morse, L (University of Denver), and Cohen, TR (麻豆村). The article is open access and freely available for download.