The work presented here investigates the process by which one group of individuals solves the problem of detecting deceptions created by other agents. A field experiment was conducted in which twenty-four auditors (partners in international public accounting firms) were asked to review four cases describing real companies that, unknown to the auditors, had perpetrated financial frauds. While many of the auditors failed to detect the manipulations in the cases, a small number of auditors were consistently successful. Since the detection of (...) frauds occurs infrequently in the work of a given auditor, we explain success by the application of powerful heuristics gained from experience with deceptions in everyday life. These heuristics implement a variation of Dennett's intentional stance strategy, which is based on interpreting detected inconsistencies in the light of the Deceiver's (i.e., management's) goals and possible actions. We explain failure to detect deception by means of perturbations (bugs) in the domain knowledge of accounting needed to apply these heuristics to the specific context of financial statement fraud. We test our theory by showing that a computational model of fraud detection that employs the proposed heuristics successfully detects frauds in the cases given to the auditors. We then modify the model by introducing perturbations based on the errors made by each of the auditors in the four cases. The resulting models account for 84 of the 96 observations (i.e., 24 auditors × four cases) in our data. (shrink)

The work presented here investigates the process by which one group of individuals solves the problem of detecting deceptions created by other agents. A field experiment was conducted in which twenty‐four auditors (partners in international public accounting firms) were asked to review four cases describing real companies that, unknown to the auditors, had perpetrated financial frauds. While many of the auditors failed to detect the manipulations in the cases, a small number of auditors were consistently successful. Since the detection of (...) frauds occurs infrequently in the work of a given auditor, we explain success by the application of powerful heuristics gained from experience with deceptions in everyday life. These heuristics implement a variation of Dennett's intentional stance strategy, which is based on interpreting detected inconsistencies in the light of the Deceiver's (i.e., management's) goals and possible actions. We explain failure to detect deception by means of perturbations (bugs) in the domain knowledge of accounting needed to apply these heuristics to the specific context of financial statement fraud. We test our theory by showing that a computational model of fraud detection that employs the proposed heuristics successfully detects frauds in the cases given to the auditors. We then modify the model by introducing perturbations based on the errors made by each of the auditors in the four cases. The resulting models account for 84 of the 96 observations (i.e., 24 auditors × four cases) in our data. (shrink)

Understanding the nature of errors in a simple, rule‐based task—programming a VCR—required analyzing the interactions among human cognition, the artifact, and the task. This analysis was guided by least‐effort principles and yielded a control structure that combined a rule hierarchy task‐to‐device with display‐based difference‐reduction. A model based on this analysis was used to trace action protocols collected from participants as they programmed a simulated VCR. Trials that ended without success (the show was not correctly programmed) were interrogated to yield insights (...) regarding problems in acquiring the control structure. For successful trials (the show was correctly programmed), steps that the model would make were categorized as matches to the model; steps that the model would not make were violations of the model. The model was able to trace the vast majority of correct keystrokes and yielded a business‐as‐usual account of the detection and correction of errors. Violations of the model fell into one of two fundamental categories. The model provided insights into certain subcategories of errors; whereas, regularities within other subcategories of error suggested limitations to the model. Although errors were rare when compared to the total number of correct actions, they were important. Errors were made on 4% of the keypresses that, if not detected, would have prevented two‐thirds of the shows from being successfully recorded. A misprogrammed show is a minor annoyance to the user. However, devices with the approximate complexity of a VCR are ubiquitous and have found their way into emergency rooms, airplane cockpits, power plants, and so on. Errors of ignorance may be reduced by training; however, errors in the routine performance of skilled users can only be reduced by design. (shrink)

This research presents a computer model called EUREKA that begins with novice‐like strategies and knowledge organizations for solving physics word problems and acquires features of knowledge organizations and basic approaches that characterize experts in this domain. EUREKA learns a highly interrelated network of problem‐type schemas with associated solution methodologies. Initially, superficial features of the problem statement form the basis for both the problem‐type schemas and the discriminating features that organize them in the P‐MOP (Problem Memory Organization Packet) network. As EUREKA (...) solves more problems, the content of the schemas and the discriminating features change to reflect more fundamental physics principles. This changing network allows EUREKA to shift from a novicelike means‐ends strategy to a more expertlike “knowledge development” strategy in which the presence of abstract concepts are triggered by problem features. In this model, the strategy shift emerges as a natural consequence of the evolving expertlike organization of problem‐type schemos. EUREKA captures many of the descriptive models of novice expert differences, and also suggests a number of empirically testable assumptions regarding problem‐solving strategies and the representation of problem‐solving knowledge. (shrink)

This research investigates the development of transferable - "adaptive" expertise. The study contrasts problem-solving performance of two kinds of experts (business consultants and restaurant managers) on novel problems at the intersection of their two domains, as well as a group of novices (non-business undergraduates). Despite a lack of restaurant experience, consultants performed better than restaurant managers and undergraduates, even though the problems concerned a restaurant. Process measures suggest this was due to the use of more theoretical reasoning. Analyses show this (...) resulted from differences in work experience and not other factors (e.g., education). We discuss aspects of experience that might be responsible for development of theoretical understanding and, thus, expertise that transfers to novel problems. One possible explanation, consistent with existing research from multiple approaches, is that to transfer to novel problems, experience must include substantive variability. The social context of learning may also play a role. (shrink)