Abstract

http://ssrn.com/abstract=2137957
 


 



Trust and Financial Reporting Quality


Jace Garrett


Bentley University - Department of Accountancy

Rani Hoitash


Bentley University - Department of Accountancy

Douglas F. Prawitt


Brigham Young University

August 28, 2012


Abstract:     
Using unique survey data from Great Place to Work® Institute, we investigate the association of intra-organizational trust (i.e., employees’ trust in management) with four aspects of financial reporting: accruals quality, misstatements, internal control quality, and audit fees (as a proxy for auditor perceptions of financial reporting risk). We find that trust is associated with better accrual quality, lower likelihood of financial statement misstatements, lower likelihood of internal control material weakness disclosures, and lower audit fees. These results enhance our understanding of the role of trust in organizations and can potentially be of benefit to boards, auditors, and other stakeholders who could use measures of trust to improve decision making.

Number of Pages in PDF File: 54

Keywords: trust, communication, accruals, internal control, misstatements, audit pricing

JEL Classification: M41

working papers series


Download This Paper

Date posted: August 29, 2012  

Suggested Citation

Garrett, Jace and Hoitash, Rani and Prawitt, Douglas F., Trust and Financial Reporting Quality (August 28, 2012). Available at SSRN: http://ssrn.com/abstract=2137957 or http://dx.doi.org/10.2139/ssrn.2137957

Contact Information

Jace Garrett
Bentley University - Department of Accountancy ( email )
175 Forest Street
Waltham, MA 02452
United States
Rani Hoitash (Contact Author)
Bentley University - Department of Accountancy ( email )
175 Forest Street
Waltham, MA 02452-4705
United States
Douglas F. Prawitt
Brigham Young University ( email )
Provo, UT 84602
United States
801-422-2351 (Phone)
801-422-0621 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 911
Downloads: 298
Download Rank: 54,888

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.453 seconds