The use of awareness as a tool to mitigate biases related to source credibility : an experimental study

Abstract

Auditors have to rely on their professional judgment regularly while performing different tasks in an audit. In some areas of audit the quality of their professional judgment is of very sensitive nature and FVMs (fair value measurements) has been identified as one of them by PCAOB (Public company accounting oversight board) This study examines the relationship between source credibility and professional judgment of auditors (students as surrogates) when awareness is applied as a tool to improve the judgment quality. In Advertising and marketing previous studies have used awareness as a tool to improve advertisement effectiveness but this study uses this tool to improve auditors’ professional judgment quality, which may contribute to the literature. This study has used students of Norwegian School of Economics (NHH) as surrogates; it was made sure that participating students have the necessary skills and knowledge to contribute to the study. Data was collected from a population of 300 students who had taken intensive courses in auditing and accounting at master’s level. The findings show that awareness has a significant impact on professional judgment of auditors.