EVIDENCE, MEMORY, AND CAUSAL ORDER IN A COMPLEX AUDIT DECISION TASK

Two experiments investigated postdecision memory bias and evidence ord er in auditing. The experimental setting replicated a 2-stage decision task in which auditors decide whether they substantially doubt an aud it client's ability to remain in business. In the 1st stage, an audit senior documents evidence after making an initial decision, and in the 2nd stage, an audit partner makes a final decision from evidence file d by the senior. The results reveal that seniors' decisions bias their postdecision recognition of evidence, and that the order in which sen iors arrange evidence affects audit partners' decisions. The study doc uments, and offers recommendations to overcome, the potential for memo ry bias and evidence order to undermine substantial-doubt decisions.