Download This PaperRe-thinking Source Credibility: How the Sleeper Effect of Credibility Influences Auditors' Evaluations of Audit Evidence
51 Pages Posted: 8 May 2020 Last revised: 15 Mar 2023
Date Written: April 14, 2020
Abstract
Auditing standards require auditors to consider management sources when evaluating evidence. However, standards are silent on how auditors should identify and incorporate relevant source information into evidence evaluation, despite the source’s importance to evidence evaluation. The “sleeper effect of the source,” a psychological phenomenon, occurs when the persuasiveness of a weak message increases over time when delivered by a credible source. Research highlights that credibility is multi-dimensional and that competence, one dimension of credibility, is context-specific. That is, an expert in one area may lack knowledge in other areas. Using an experiment, we find that when a credible source provides unconvincing evidence, auditors are subject to a sleeper effect. Current audit practices regarding management assessments result in auditors focusing on overall credibility, as opposed to context-specific competence, when evaluating evidence. We propose and test a documentation intervention that aids auditors in incorporating context-specific competence into evidence evaluations and moderates the sleeper effect.
Keywords: evidence evaluation, auditor-client interactions, source credibility, context-specific competence, audit documentation, audit quality
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