Trusting/Distrusting Auditors' Opinion

37 Pages Posted: 13 Nov 2008 Last revised: 10 May 2009

See all articles by Waymond Rodgers

Waymond Rodgers

University of California, Riverside

Andrés Guiral

University of Alcala

Jose A. Gonzalo-Angulo

Universidad de Alcala de Henares

Lisbeth Hedelin

University of Gothenburg

Date Written: November 9, 2008

Abstract

Trust relations are important for effective interchanges between auditors (trustees) and market participants (trustors) such as investors, creditors, customers, and other users of financial statement information. In particular, auditors' opinion regarding client's ability to continue in existence is essential to improving social capital in Society. Previous literature has shown that the issuance of a qualified audit report with doubts about the viability of a company may have imminent consequences for both auditors and financial statement users. We build on previous research by analyzing auditors' trustworthy behavior regarding this important opinion in a Throughput Model. A number of propositions are forwarded regarding how investors and other users may trust (distrust) auditors' opinions. In this regard, dominant determinants of six trust positions were used to explain the auditors', and in turn investors' and creditors' decision-making process.

Suggested Citation

Rodgers, Waymond and Guiral, Andres and Gonzalo-Angulo, Jose A. and Hedelin, Lisbeth, Trusting/Distrusting Auditors' Opinion (November 9, 2008). IACM 21st Annual Conference Paper. Available at SSRN: https://ssrn.com/abstract=1298487 or http://dx.doi.org/10.2139/ssrn.1298487

Waymond Rodgers (Contact Author)

University of California, Riverside ( email )

900 University Avenue
Riverside, CA 92521
United States

Andres Guiral

University of Alcala ( email )

Plaza de la Victoria s/n
Alcala de Henares, Madrid 28802
Spain

Jose A. Gonzalo-Angulo

Universidad de Alcala de Henares ( email )

Plaza de la Victoria 3
Alcala de Henares
E-28802 Madrid
Spain

Lisbeth Hedelin

University of Gothenburg ( email )

Berndt Anders väg 19
Åsa, SE-439 53
Sweden

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