Debiasing the Halo Effect in Audit Decision: Evidence from

Experimental Study

By : Intiyas Utami Indra Wijaya Kusuma

Gudono Supriyadi
Publikasi : 02 Mei 2017
 TUJUAN PENELITIAN

This research aimed to test the existence of the halo effect caused by the
presentation of information scope (holistic/specific), which can eventually
lead to an inaccurate risk assessment. of material misstatement. Empirical
evidence is provided to demonstrate that methods of knowledge acquisition
(explanatory feedback and self-explanation) are able to mitigate the halo
effect.
TINJAUAN TEORI

The halo effect appears when the auditors’

impression in responding to holistic information
affects the mental representation at their
subconscious level. (Balzer and Slusky, 1992)

The halo effect causes individuals to change their

criteria in evaluating and weighing decision information.
(Murphy, 1982)

Auditing research (Bonner and Walker, 1994;

Earley 2001, 2003) indicates that training can
increase auditing performance.
TINJAUAN TEORI

Psychology literature provides the theoretical

basis from which novice auditors who use self-
explanation method will obtain procedural
knowledge. (Early et al., 2008)

In the auditing context, Earley (2003) offer empirical

evidence which show that in training, self-explanation
learning can enhance auditors’ judgment.

H1: Auditors with the halo effect condition will make more
accurate audit decision if they make self explanation.
TINJAUAN TEORI

Hogarth (2001) stands by the belief that the

concept of learning consists of the quality of
feedback and the consequence of errors. He
adds that the auditors’ knowledge acquisition for
the analytical procedure is improved through
feedback or by increasing their cognitive efforts

Balzer and Slusky (1992) came to the conclusion that

feedback is an effective factor in decision-making and
it aids in increasing the accuracy of the decision-
making process.
TINJAUAN TEORI

It is proposed that the method of knowledge

acquisition in mitigating the halo effect is also
explanatory feedback. (Clarkson et all., 2002)

H2: Auditors with the halo effect condition will

make more accurate decision if they receive
explanatory feedback.
MODEL PENELITIAN
Self Explanation

Halo Effect Audit Decision

Explanatory
Feedback
 VARIABEL PENELITIAN
No. Jenis Variabel Nama Pengukuran
1. Independen Halo effect Experiment
2. Independen Knowledge acquisition method (self- Experiment
explanation and explanatory feedback)
3. Dependen Audit decision Experiment

The experiment was conducted by organizing the seminar on International

Standard Auditing (ISA): Experience and Learning from Auditors’ Error Typology
and this was held in Surabaya, Indonesia, on 2nd February, 2013. The seminar was
considered to be effective if auditors were invited as subjects of the experiment.
 HASIL PENELITIAN
Hasil Penelitian H1
H1 is not supported
The current study has failed to propose
that the self-explanation knowledge
acquisition method as a mitigation
strategy could reduce the halo effect in
determining the risk assessment of
material misstatement.
Hasil Penelitian H2
H2 is supported
The knowledge acquisition method of explanatory
feedback will reduce the halo effect in determining
the risk assessment of material misstatement. The
findings noted here are also consistent with the
findings of previous studies, which found that
explanatory feedback enhances the accuracy of
decision-making (Balzer and Slusky, 1992; Earley,
2001; Bonner and Walker, 1994).
IMPLIKASI MANAJERIAL

CPA firms can use explanatory

feedback, which comes in the
form
. of managers’ review as a
form of knowledge acquisition
method as a mitigation
strategy for the halo effect.

Halo effect can influence the

decision in many aspect.
Individual must increase their
professional value with many
training that useful to mitigating
the halo effect.
 Logical Connection

Semakin baik perusahaan dalan menjalankan strategi

metode umpan balik penjelas, maka Halo Effect akan
rendah, dan dengan rendahnya halo effect akan
mengurangi kemungkinan terjadinya penilaian risiko
salah saji material yang tidak akurat.
THE END
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