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    Information Sharing during Auditors’ Fraud Brainstorming: E...
    research summary posted June 22, 2017 by Jennifer M Mueller-Phillips, tagged 06.08 SAS No. 99 Brainstorming – effectiveness, 11.03 Management/Staff Interaction 
    Information Sharing during Auditors’ Fraud Brainstorming: Effects of Psychological Safety and Auditor Knowledge
    Practical Implications:

    Staff and seniors auditors often times have more interaction with client personnel than other members on the team. These interactions provide them with insight into fraud-relevant information which is extremely valuable to the audit. It is important that partners create a group dynamic that is both supportive and nonthreatening in order to facilitate idea sharing. Firms can make brainstorming more effective by providing leadership training to partners encompassing these ideals.


    Gissel, J. L., and K. M. Johnstone. 2017. Information Sharing during Auditors’ Fraud Brainstorming: Effects of Psychological Safety and Auditor Knowledge. Auditing, A Journal of Practice and Theory 36 (21): 87-110.

    Audit planning; fraud brainstorming; information sharing; leadership; psychological safety
    Purpose of the Study:

    Brainstorming related to fraud is an important step during an audit. This study investigates the effects that perceived psychological safety and auditor knowledge have on how auditors interact during brainstorming. Specifically, the magnitude to which these factors affect an auditor’s willingness to share privately known, fraud-relevant information. The authors research under the assumption that a partner’s leadership is the driving force behind an auditor’s perception of psychological safety during brainstorming.

    Design/Method/ Approach:

    First, the 71 participants (38 staff and 33 seniors) reviewed case materials related to fraud-relevant risks. Afterwards, the participants watched a simulated brainstorming session. In the video the psychological safety of the situation was altered based on how the partner leading the session communicated. Results were determined based on the auditors’ reaction to the simulation and audit knowledge. The audit knowledge was measured by months of experience and familiarity with SAS NO. 99 and revenue recognition issues.


    The authors find the following:

    • Less-knowledgeable auditors are more likely to share privately known, fraud-relevant information in a setting they perceive as supportive and nonthreatening.
    • Alternatively, psychological safety does not affect more-knowledgeable auditors on their willingness to share such information. The authors believe this is due to experienced auditors understanding the critical importance of relaying this information to the team.
    • Less-knowledgeable auditors still want to contribute to the meeting during less psychological safe meetings. However, instead of providing privately known information, they chose to share commonly known, fraud-relevant and fraud irrelevant-knowledge. This is viewed as a safer choice because it is likely not controversial or surprising. 
    Audit Quality & Quality Control, Risk & Risk Management - Including Fraud Risk
    Management/Staff Interaction, SAS No. 99 Brainstorming – effectiveness