The image of an accountant as a dispassionate person who isn’t influenced by status or environment doesn’t reflect today’s professional, according to Justin Leiby, associate professor of accountancy at Gies College of Business.

“It struck me how much emotions and feelings drive decision-making in the real world, yet much research has focused on how to take their impact out of the process. The emotional side is a reality to embrace and work with instead of against,” said Leiby.

Leiby’s research and teaching interests focus on the role of social relations and interactions in auditing. He is the Professor Ken Perry Faculty Fellow in Accountancy at the College. Leiby earned bachelor’s degrees in accounting and German at the University of Pittsburgh and his PhD in Accounting from Gies College of Business in 2011.

Leiby then headed south, working as an assistant professor of accounting at the University of Florida and subsequently the University of Georgia before returning to Illinois in 2018.

“It wasn’t a big secret I’d like to come back here. Gies has one of the best behavioral accounting programs in the country, and my wife and I didn’t realize how much we loved this place until we left,” Leiby said. “It was an easy decision to come back. This community accepts you for who you are and eases stress instead of creating it.”

Leiby’s Risk Management and Innovation course focuses on empathy building. It uses empathic design thinking to challenge accounting students to manage risk by first considering how stakeholder thoughts and feelings impact how they react to risk.

He has integrated virtual reality (VR) experiences into his course, and he is also in the early stages of developing a project with his students to examine how VR impacts remote working, which has become the status quo during the COVID pandemic. It builds on research that shows immersive environments create greater empathy and other interpersonal bonds.

“One great advantage of VR over Zoom’s teleconference platform, for example, is that it is free from distraction. Instead of looking at someone else’s home office, you’re in the virtual same space that’s a neutral environment,” said Leiby. “This impacts how much you invest in your performance on a given task.”

The goal is to find practical implementations for VR and use it to do certain audit procedures. He believes the area that’s most promising is coaching.

“There are critical interactions as an auditor when you need to gain someone’s attention and trust, like giving performance feedback. These are teachable moments. But giving feedback by email is terrible and by phone or a Zoom call isn’t much better. A level of engagement is missing,” he said.

Post-COVID-19 VR could also reduce travel time, create smaller carbon footprints, and respond to younger professionals’ desire to create more flexibility in their work schedule.

“This research hopes to prove that remote working can be effective and prove its value to those who make workplace decisions at firms,” he said, noting that VR is already growing in acceptance on the consulting side of accounting firms.

Leiby has collaborated with Anna Gold (VU Amsterdam) and Kathryn Kadous (Emory/Gies PhD) on a project for The Foundation for Auditing Research (FAR) that started with premise that the way people assess expertise is fundamentally incorrect. This applies to accounting in that regulators are concerned that auditors rely on experts without delving deeper into the underlying quality of their work. They created a case based on real-world input concerning the audit of the fair values of investment properties. Professional auditors viewed one of three versions that shows the dynamic between an expert and the client.

“This is fascinating. We asked them to assess the competence of an expert. We found they unintentionally confuse status with competence. On the surface, auditing appears to be rigid and standardized with guidance for everything. In reality, auditors live in an ambiguous world where they need to make their best guess if the valuation of things outside their expertise is reasonable,” he said. “Generally, it becomes easier to push back to a client if the auditor has the support of an expert with a powerful social network, which helps to smooth the waters.”