Debiasing the Outcome Effect: The Role of Instructions in an Audit Litigation Setting

• DOI: 10.2308/aud.2002.21.2.7
• Publication Date: 2008-04-11T23:09:51Z
• Authors: Peter M. Clarkson; Craig Emby; Vanessa W.-S. Watt
• Keywords: Debiasing; Seriousness; Ex-ante; Lawsuit; Hindsight bias; Confirmation bias

The outcome effect occurs where an evaluator, who has knowledge of the a judge's decision, assesses quality judgment that decision maker. If evaluator negative outcome, then negatively influences his or her assessment ex ante judgment. For instance, jurors in lawsuit brought against auditor for alleged negligence are informed undetected fraud, even though unqualified opinion was issued. This paper reports results experiment applied audit setting examined methods mitigating by means instructions. showed simply instructing warning about potential biasing effects information only weakly effective. However, instructions stressed either (1) cognitive nonnormativeness (2) seriousness and gravity evaluation ameliorated significantly. From theoretical perspective, suggest there may both motivational components to effect. In all, findings awareness use relatively nonintrusive evaluators effectively counteract bias.