The Incremental Benefits of a Forensic Accounting Course on Skepticism and Fraud-Related Judgments

ABSTRACT: This study examines the extent to which providing a course that emphasizes forensic accounting influences students’ fraud-related judgments. We follow a cohort of students (trained students) who have enrolled in a forensic accounting course and examine their fraud judgments at various points in time—the first day of instruction, the last day of instruction, and seven months later. We compare these fraud judgments to a control group of students who have completed a typical two-course audit sequence (untrained students) and to a panel of fraud experts. We find that when confronted with a bad debt expense account that is unusually small, trained students provide significantly higher initial risk assessments post-training (1) than they did pre-training and (2) than did the untrained students. In addition, after being presented with a set of potential fraud-risk factors, trained students provided higher revised risk assessments post-training than they did pre-training, and importantly, not significan...