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Cited by 3Auditing, Earnings Management, GovernanceCorporate Governance and Financial ManagementBenford’s Law and Fraud Detection

Inheriting Versus Developing Data Analytic Tests and Auditors’ Professional Skepticism

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LI, XIAOXING, BRAZEL, JOSEPH F., GOLD, ANNA, LEIBY, JUSTIN·2026·Journal of Accounting Research
DOI 10.1111/1475-679x.70014
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Abstract

As the use of audit data analytic tests (ADA) becomes increasingly established in practice, auditors will often confront situations in which they inherit ADA developed by others, as opposed to developing the ADA themselves. Despite the potential benefits of ADA, inheriting ADA could decrease auditors’ skeptical actions by diminishing their psychological ownership of the ADA. In an experiment where an ADA identifies a fraud red flag, we find that auditors who inherited the ADA are less likely to exercise skeptical actions than those who were personally involved in its development. We then provide evidence that informing auditors who inherit an ADA about the test development activities (e.g., a brief memorandum documenting the ADA's development) mitigates the negative effect of inheriting the ADA. Evidence from mediation analyses suggests that these effects are driven by decreased psychological ownership when auditors inherit the ADA.

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Related

Authors
LI, X., BRAZEL, J. F., GOLD, A., & LEIBY, J.
Affiliations
  • Norwegian School of Economics (NO)
  • North Carolina State University (US)
  • Department of Accounting Auditing and Law, NHH Norwegian School of Economics
  • University of Illinois Urbana-Champaign (US)
Corresponding author
LEIBY, JUSTIN
ORCID
Venue
Journal of Accounting Research
Publisher
Wiley
Published
2025-09-09
Volume
64
Issue
2
Pages
885-922
ISSN
  • 0021-8456 (ISSN-L)
  • 1475-679X
DOI
10.1111/1475-679x.70014
OpenAlex
W4414087778
Cited by
3
References
76
Citations by year
2026: 2 · 2025: 1
FWCI
7.75
Type
journal article
Language
en
Open access
Licence
Locations
  • Journal of Accounting Research (publishedVersion, cc-by)
  • SSRN Electronic Journal (acceptedVersion)
  • VU Research Portal (submittedVersion, other-oa)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Auditing, Earnings Management, Governance
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Governance and Financial Management
  • Physical Sciences › Mathematics › Statistics and Probability › Benford’s Law and Fraud Detection
Keywords
auditor professional skepticism, psychological ownership, fraud red flags, audit evidence, auditor behavior

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