The profession of accountant in recent years has gone under the spotlight following many cases involving big corporations and public accountants. Public accountant who is "naughty" is only liable for administrative sanction or revocation of practice license. But they will not get away from the global pressures and so potentially become a target of litigation or trial in the future.
One of the main causes of litigation is the gap between what is expected by the public of the auditing work and with what is expected from the audit itself. The public, especially investors, creditors, and government, have big expectation and want the information contained in financial statements on economic decision-making process. "This expectation arises because they believe that the fair information has been verified by independent auditors so it is seen as a guarantee," said Drs. I Made Narsa, M. Si, Ak., on Friday (3/11) during an open examination of his doctoral program in the Faculty of Economics and Business UGM.
Due to the gap, according to I Made Narsa, a member of faculty of Economics and Business Faculty of Airlangga University, those who feel aggrieved by the decision of public accountant will report the accountant for cheating. When auditors face litigation and accused of negligence, the evaluator/judge will evaluate ex post whether the auditor has conducted professional prudence in his job ex ante. "Auditors and evaluators are two opposite parties. Auditors are in the past (foresight) while the evaluator is at the moment after the final result is known (hindsight)," said the man born in Jembarana on June 27, 1965.
Those different perspectives, Made Narsa said, have caused the gap between auditors and evaluators. This gap can be narrowed by improving the decision making process in order that the quality increases.
Having defended his dissertation entitled "Foresight Decision Aid Device and Bias Hindsight Mitigation Strategies for Narrowing Perspective Gap between Auditors and Evaluators", Made Narsa mentioned that from evaluator’s view, the gap can be narrowed by influencing evaluation process. Evaluators who know the negative emergence experience cognitive bias that is based on semantic association.
"Theoretically, bias based on semantic association can be mitigated by giving additional stimuli as a strategy to mitigate the hindsight bias, so that evaluator’s assessment becomes more objective. This means that the evaluator's decision shifts to the perspective of foresight," he explained.
In order to narrow the gap between perspective of auditors and evaluators, Made Narsa in his research tested two strategies. The first strategy uses aid devices of single-emergence and double-emergence foresight decision which are oriented to improve the quality of auditor’s decision-making process. The next strategies are in the form of alternative emergence of hindsight bias mitigation and bias strategy of alternative stakeholders hindsight aimed at changing the process of evaluation by the evaluator.
From the research results, it is known that auditor and elevator experience cognitive bias due to the influence of emergence, where the auditor experiences erroneous consideration and evaluators have encountered an erroneous consideration. Erroneous predictive and evaluative considerations can be mitigated.
The husband of Ni Nyoman Sujani added that expectation of auditors in foresight can be changed near expectation of evaluators in hindsight, as well as perception of the evaluator in assessing the performance of auditors' perspective ex ante can shift closer to foresight. "These findings indicate that any mitigation strategies that are used in narrowing the gap between the perspectives of auditors and elevators provide nearly the same moderating influence," he explained.