The implications of auditors' dispositional trust and career advancement opportunities for the detection of fraud

This research reports on the results of measurements of professional auditors dispositionaltrust as it may relate to the propensity for an auditors career advancement. Under controlledconditions, we collected dispositional trust scores from 216 practicing auditors at Big 4firms. In addition, to develop a more complete picture of trust in the audit profession, wecollected dispositional trust measures from 53 graduate accounting students who planned toenter the auditing profession upon graduation. The results of the analyses indicate thatauditors in manager and partner positions in audit firms are significantly more trusting thanare auditors at staff and senior levels and auditing students. Given that dispositional trust is astable personality trait, there is evidence that the organizational structure of audit firmspromotes the advancement of highly trusting individuals, while forcing out less trustingauditors. Prior experimental research finds that more trusting auditors are less likely todetect fraud and errors, and more trusting auditors evaluate audit evidence less thoroughlythan do less trusting auditors. Based on the findings of prior dispositional trust research andthe results of the current study, it appears that the advancement of highly trusting individualscould result in the promotion of effective client management at the expense of detectingfraud and other irregularities.