Super Shears: Micro Cases to Reduce Confirmation Bias in Evaluating Management Estimates

Abstract

This two-case set offers evidence of the need for and effectiveness of practice in evaluating evidence and auditing management estimates using both students and audit professionals. Participants must identify and evaluate confirming and disconfirming evidence for management's accrual for allowance for uncollectible accounts and warranty reserves. After practice and feedback in the first case, the second set offers added practice and measures skill improvement. The cases specifically target the perennial problem of “confirmation bias.” Responses from 51 auditing students and 53 auditors (from staff to partner) indicate these tasks are effective, realistic, and motivating.