Sean Hillison

Nearly a decade ago, before his research posed the question, “how can financial statement auditors rise above to do better?” Sean Hillison asked himself the very same question.

It was May 2011, and Hillison was faced with a decision. He was nine years into a career as an audit senior manager with Ernst & Young’s South Florida-based assurance group, and he was ready for new experiences. Hillison stated, “I felt like I was ready to tackle a new challenge. I had to make a choice—do I keep with my current profession or do I make a change?”

Hillison chose to make a change. He left behind a successful career in public accounting to enroll in a Ph.D. program in accountancy at the University of Illinois at Urbana-Champaign. It was there that a research project was born.

Today, Hillison, an assistant professor in the Department of Accounting and Information Systems (ACIS), is celebrating the imminent publication of a co-authored research paper. “This was the result of endless hours of work,” Hillison added. “It took us several years to get to the finish line, but we made it.”

The paper, "Revising Audit Plans to Address Fraud Risk: A Case of 'Do as I Advise, Not as I Do?'", has been accepted for publication in Contemporary Accounting Research, a leading peer-reviewed academic journal covering research on all aspects of accounting’s role within business, markets, and society.

“An auditor’s primary function is to protect the investor and the economy,” explained Hillison. “I’m interested in how auditors can better respond to fraud risk. The occurrence of fraud is rare, but it can have a profound impact on our economy. Just think back to the effects of frauds like Worldcom and Enron.”

In his paper, Hillison uses psychology theory to consider the way an auditor thinks when they are making decisions for themselves as opposed to when they are making decisions as advisors, and how the respective mindsets can influence their response to fraud risk.

“Something as simple as changing the frame of mind alters the whole approach to a problem,” Hillison said.

“When financial auditors—the gatekeepers of the economy—take on a different mindset, they can see the forest for the trees,” he continued. “They are advising versus performing. We find that if an auditor can picture advising a peer, they will come to a better decision than they would when deciding for themselves. An ‘advising’ mindset makes for better decision-making and helps in responding to identified fraud risks.”

Hillison believes the results of his research could have a positive impact on how auditors are trained. “From the standpoint of practicing auditors, this research can help practitioners better understand why they may fail to appropriately address identified fraud risks,” he explained. “Audit firms may be able to help through training and interventions to properly prepare their auditors.”

He also believes that his findings may have a place in the classroom, while students are learning how to become auditors. “Anytime you can bring research into the classroom it is beneficial to both the students and the instructor. One feeds off the other—students learn from the research and, in turn, the students help inform future research.”

Every academic research project is distinctive in its subject matter or its findings; what makes this paper distinct is how the research was implemented. “This research was performed using experimental methodology,” he explained. “Experimental research asks the questions, ‘Why did this happen?’ and ‘How do we change?’”

It was the ability to continue to perform research such as this that lead Hillison to Blacksburg upon the completion of his Ph.D. “I came to Virginia Tech because I wanted to continue learning,” he said. “I can continue to research, continue to learn, all while teaching high-quality students and learning from them.”

Hillison continued, “The ACIS program focuses on producing top-quality research. The faculty here contribute to a great environment for producing top-quality research.”

Producing top-quality research is exactly what Hillison intends to continue to do. “This paper was a big learning experience for me since it started well back in my doctoral program,” he added. “My co-authors were instrumental in both my professional success as well as the success of the research.

“This project was an incredible learning opportunity for me. It feels good to share my research with others, but I still have a long way to go.”

— Written by Jeremy Norman