Forum for Science, Industry and Business

Study Finds Brainstorming Rules Can Lead to Real-World Success in Business Settings

“Previous research has laid out best practices that are conducive to brainstorming, or group decision making, and we wanted to see whether using those practices makes a difference in the real world,” says Dr. Joe Brazel, associate professor of accounting at NC State and co-author of a paper describing the research.

“We found that, when tackling complex issues, the use of best practices to produce high-quality brainstorming did result in better decision making,” Brazel says. For example, if an accounting firm has a client with a high fraud risk, what procedures do you need to employ in order to detect fraud? “When an audit team had taken steps to ensure high-quality brainstorming, we found them employing fraud detection techniques, such as surprise inventory checks, sales verifications, et cetera. When an audit team wasn’t using the brainstorming best practices, we saw them identify risk and then take no pursuant action.”

Brainstorming is a required component of the planning process for firms that are responsible for detecting corporate fraud. In this study, the researchers wanted to see if there was variation in how these firms conducted their brainstorming sessions, and whether those variations affected the quality of their work. The study found that there are 21 specific best practices that contributed to successful brainstorming efforts, and that the benefits of high quality brainstorming could be attained when at least 10 to 11 of those practices are put into place – such as the inclusion of subject-matter specialists and an openness to input from all team members.

While this research is certainly applicable to fraud detection, Brazel says that its findings are broadly applicable throughout the business world. “When facing a complex problem in any field of business, this research tells us that it is important to incorporate high-quality brainstorming techniques in order to improve your ability to successfully resolve the problem.”

The researchers also found one variable that can negate any potential benefits of high quality brainstorming: managerial bias. If a team leader comes into the brainstorming process with well-known preconceived notions, that effectively short-circuits the brainstorming effort – and using best practices will not help.

NC State’s Department of Accounting is part of the university’s College of Management.

-shipman-

Note to Editors: The presentation abstract follows.

“Auditors’ Use of Brainstorming in the Consideration of Fraud: Reports from the Field”

Authors: Joseph F. Brazel, North Carolina State University; Tina D. Carpenter, University of Georgia; J. Gregory Jenkins, Virginia Polytechnic Institute and State University

Published: July 2010, The Accounting Review

Abstract: Audit standards require auditors to conduct fraud brainstorming sessions on every audit. The Public Company Accounting Oversight Board has raised concerns about auditors’ fraud judgments and the quality of their brainstorming sessions. We develop a measure of brainstorming quality to examine how it affects auditors’ fraud decision-making processes. We test our measure using field survey data of auditors’ actual brainstorming sessions for 179 audit engagements. Respondents report considerable variation in the quality of brainstorming in practice. We find some evidence that high-quality brainstorming improves the relations between fraud risk factors and fraud risk assessments. We also determine that brainstorming quality positively moderates the relations between fraud risk assessments and fraud-related testing. Our results suggest that the benefits of brainstorming do not apply uniformly, because low-quality sessions likely incur the costs of such interactions without receiving the attendant benefits. By documenting best practices from high-quality brainstorming sessions, our findings can inform auditors on how to improve their consideration of fraud.

Matt Shipman | EurekAlert!
Further information:
http://www.ncsu.edu

Im Focus: Can we see monkeys from space? Emerging technologies to map biodiversity

An international team of scientists has proposed a new multi-disciplinary approach in which an array of new technologies will allow us to map biodiversity and the risks that wildlife is facing at the scale of whole landscapes. The findings are published in Nature Ecology and Evolution. This international research is led by the Kunming Institute of Zoology from China, University of East Anglia, University of Leicester and the Leibniz Institute for Zoo and Wildlife Research.

Using a combination of satellite and ground data, the team proposes that it is now possible to map biodiversity with an accuracy that has not been previously...

Im Focus: Climate satellite: Tracking methane with robust laser technology

Heatwaves in the Arctic, longer periods of vegetation in Europe, severe floods in West Africa – starting in 2021, scientists want to explore the emissions of the greenhouse gas methane with the German-French satellite MERLIN. This is made possible by a new robust laser system of the Fraunhofer Institute for Laser Technology ILT in Aachen, which achieves unprecedented measurement accuracy.

Methane is primarily the result of the decomposition of organic matter. The gas has a 25 times greater warming potential than carbon dioxide, but is not as...

Im Focus: How protons move through a fuel cell

Hydrogen is regarded as the energy source of the future: It is produced with solar power and can be used to generate heat and electricity in fuel cells. Empa researchers have now succeeded in decoding the movement of hydrogen ions in crystals – a key step towards more efficient energy conversion in the hydrogen industry of tomorrow.

As charge carriers, electrons and ions play the leading role in electrochemical energy storage devices and converters such as batteries and fuel cells. Proton...

Im Focus: A unique data centre for cosmological simulations

Scientists from the Excellence Cluster Universe at the Ludwig-Maximilians-Universität Munich have establised "Cosmowebportal", a unique data centre for cosmological simulations located at the Leibniz Supercomputing Centre (LRZ) of the Bavarian Academy of Sciences. The complete results of a series of large hydrodynamical cosmological simulations are available, with data volumes typically exceeding several hundred terabytes. Scientists worldwide can interactively explore these complex simulations via a web interface and directly access the results.

With current telescopes, scientists can observe our Universe’s galaxies and galaxy clusters and their distribution along an invisible cosmic web. From the...

Im Focus: Scientists develop molecular thermometer for contactless measurement using infrared light

Temperature measurements possible even on the smallest scale / Molecular ruby for use in material sciences, biology, and medicine

Chemists at Johannes Gutenberg University Mainz (JGU) in cooperation with researchers of the German Federal Institute for Materials Research and Testing (BAM)...