Auditors' Levels of Dispositional Need for Closure and Effects on Hypothesis Generation and Confidence

Dispositional Need for Closure (DNFC; Webster and Kruglanski 1994) concerns the propensity to seek and process information before reaching a judgment. Psychology researchers have demonstrated consistent effects on hypothesis generation and confidence in lay-judgment settings. Although psychology literature, in a validation sample, identifies accounting students as a group high in DNFC, we find professional auditors significantly lower in DNFC than reported in their sample of accounting students, and progressively lower in DNFC at higher professional ranks. Yet, substantial variance in this critical characteristic persists even at higher ranks, to potentially affect judgment. Since findings concerning lay decision makers are not always applicable to accounting professionals, we investigate the effects of DNFC on the hypothesis generation and confidence of experienced auditors. Auditors higher in DNFC generate fewer, lower-quality hypotheses, yet express greater confidence in their hypothesis set. Broader implications are discussed.