Memory measure differences in fraud risk assessments: Implications for the design and use of audit decision aids

Since memory is inferred from behavior, what can be inferred about memory depends on how it is tested. Graduate auditing students' memory is examined with regard to cues of management fraud. Specifically, the study uses a 2x2 ANOVA design to investigate the differences in retrieval bias generated by two measures of memory: recall and recognition. The results show that given a management fraud scenario, recognition is a more complete and accurate measure of memory than recall. This suggests that: (1) recognition-based audit decision aids such as expert systems are better than recall-based decision aids such as comprehensive checklists for complex audit scenarios; and (2) studies examining retrieval bias as a potential source of decision errors in auditing should also take into account the manner in which evidence as to the retrieval bias is obtained, such as the manner in which auditor memory is tested.