Teaching logic to auditing students : can training in logic reduce audit judgement errors

Recent audit failures of unprecedented magnitude and their effects upon the capital markets have resulted in heightened public and regulatory concern towards the auditing profession. Increased scrutiny and a possible movement to principles-based accounting standards are creating an auditing environment in which “critical thinking” skills will be increasingly important. Consequently, rule based auditing courses may be insufficient to prepare students for the emerging discipline. Logic is an important component of “critical thinking;” in fact, the two are considered synonymous in the philosophy literature. Although logic has been called “the mother discipline of auditing” (Mautz & Sharaf, 1961. Philosophy of auditing. Sarasota, FL: American Accounting Association), training in logic is conspicuously absent from accounting curricula, while research in logic is almost non-existent in both the accounting education and audit judgment literatures. Students in this study were taught formal and informal logic in an auditing course. They studied valid and invalid argument forms within the specific context of auditing services. These students, others without training, and a sample of professional auditors were then tested with a series of real-world auditing vignettes requiring critical reasoning and judgment. Students trained in logic outperformed students without such training. Furthermore, students trained in logic outperformed experienced auditors in their abilities to discern valid versus invalid argument forms. Conversely, experienced auditors outperformed trained students in their abilities to discern believable versus less believable argument premises. The results of the study have important implications both for university education and for continuing professional education for auditors.