Title: Auditor Decision-Making Bias: Testing the Effect of Scope and Order of Information Presentation

Authors: Niluh Made Dian Novita Handayani Narsa

Affiliations : Masters Program in Accounting, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia

Publisher: Universitas Airlangga

Abstract

The phenomenon of auditor negligence in detecting material misstatements that result in an incorrect opinion is the background of this study. Before performing audit procedures, auditors determine the company's risk level. To determine this risk level, relevant information regarding the company's condition is needed. This information can be qualitative or quantitative. Information provided in the field varies in form, one of which is its scope. The general information received causes auditors to focus on the general picture of the company's condition. In addition to the scope of information, the order in which information is presented must also be considered when making decisions. The sequence effect produces two other effects that can cause decision-making bias. This study focuses on testing the primacy effect because previous research has shown that the recency effect causes bias without examining the primacy effect. This study used an experimental method with a 2x2 design tested using ANOVA. The results showed that decision-making bias can be caused by the scope and sequence of information. This suggests that decision-making bias can be caused by the primacy effect, which has rarely been examined.

Keywords: information scope, order information, audit risk

Sources: http://repository.unair.ac.id/97845/