Risk Type in an International Sample of Auditors

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Risk Type in an International Sample of Auditors by Geoff Trickey, So Yi Yeung & Keith McGrane Commissioned by RABQSA

Executive Summary This project was carried out in conjunction with RABQSA; sampling auditors in Canada, the USA and Australia (N = 198). The aim of this research was to identify any systematic patterns in the natural disposition towards risk-taking of the sample, classifying each participant according to a taxonomy of eight Risk Types. Risk Type is considered to reflect deeply rooted dispositions that embrace perception of risk, risk tolerance and propensity for risk-taking. A second questionnaire explored current attitude towards risk-taking in five commonly researched areas of risk; recreational, social, financial, ethical and health & safety. The results of our analyses show a very distinct Risk Type distribution for the auditor sample with a clear prevalence towards the Deliberate and Composed Risk Types. Across the sample, the study found little differentiation in terms of prevalent attitude to risk across the five domains. Our analysis also differentiates between job level, job title, certification length and country of origin.

Introduction The Risk-Type Compass™ captures the aspects of personality that influence a person’s perception of risk, readiness to take risks and ability to cope with it. It categorises each individual as one of eight Risk Types as well as generating a Risk Tolerance Index (RTi). The Risk-Type Compass™ questionnaire is based on personality assessment techniques, building this more focused assessment on the accumulated knowledge that has produced a considerable global consensus about the structure of personality; the Five Factor Model (FFM). Risk Type is considered to be a component of temperament and, like other personality attributes, to be deeply rooted and consistent over a working life. Under stress and pressure, behaviour is likely to regress and become increasingly instinctive and we are likely to revert to type. In its original and fullest form of the assessment, a second questionnaire explores differences in attitude towards five different risk domains; recreational, social, financial, ethical and health & safety risk. In the view of the authors, risk attitude reflects a person’s circumstances, their experience and a wide range of relatively transient and unsystematic influences. As such, any attitude assessment provides a ‘snap shot’ at a moment in time, rather than a pervasive longer-term influence. Although attitudes are variable, easily influenced ‘surface’ characteristics, assessments have tended to focus on attitude rather than on personality, partly because the type/attitude distinction had not previously been articulated, partly because risk assessments had no consensual basis and partly because of the absence of any psychometric measures that specifically address risk. The Risk-Type Compass™ assessment was designed to allow people management and staff deployment to take account of these deeply rooted characteristics, to enable a more coherent articulation of human factor risk and to promote a better understanding and self-awareness in those who manage risk and employees in other risk related roles. It provides insights that can easily be missed by interviews, simulations or short-term behavioural observation.

Copyright © 2011 Psychological Consultancy Ltd

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