Auditing standards require external auditors to inquire of client employees regarding their knowledge of actual or suspected fraud (e.g., PCAOB 2010b; AICPA 2016). However, the extant literature provides little guidance on practical methods that auditors can employ to increase the likelihood of fraud disclosure and improve audit quality. Drawing upon best practices in the whistleblowing hotline literature and psychological theories on self-regulation, we experimentally test the efficacy of two practical strategies that auditors can employ during the fraud inquiry process and that are likely to overlap in practice settings: actively promoting statutory whistleblower protections and strategically timing their fraud inquiries. Our experimental results indicate that both strategies are effective in eliciting increased disclosure of fraud. Specifically, we find that auditors are more likely to elicit client-employee disclosures of known fraud by actively promoting statutory whistleblower protections and strategically timing the fraud inquiry to take place in the afternoon, when client-employee self-regulation is more likely to be depleted. These two audit inquiry strategies should be of considerable interest to audit practitioners, audit committees, and those concerned with improving audit quality.

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