Audit Reviewers' Evaluation of Subordinates' Work Quality

Auditing: A Journal of Practice & Theory, Forthcoming

32 Pages Posted: 13 Sep 2009

See all articles by Hun-Tong Tan

Hun-Tong Tan

Nanyang Business School, Nanyang Technological University

Premila Gowri Shankar

Nanyang Technological University (NTU) - Division of Accounting

Date Written: September 10, 2009

Abstract

Reviewers routinely assess the quality of preparers’ work as part of the quality control mechanism in the audit review process. We investigate whether reviewers’ assessment of preparers’ work quality is jointly influenced by their initial opinions on the audit task, the strength of the justification underlying the preparers’ conclusions, and the importance reviewers ascribe to whether subordinates’ work is aligned with the superiors’ preferences. We find that audit reviewers accord better (poorer) performance ratings to preparers’ justification memos with conclusions that are congruent (incongruent) with their initial opinions, with the opinion congruence effects being greater for memos with stronger justifications. These results are moderated by the extent to which reviewers believe that it is important for subordinates to align their work with the superior’s preferences. Opinion congruence effects for low alignment-importance reviewers are moderated by justification strength, but not for high alignment-importance reviewers.

Keywords: Performance evaluation, audit review process, opinion congruence, justification strength, rater characteristics, impression management

Suggested Citation

Tan, Hun-Tong and Gowri Shankar, Premila, Audit Reviewers' Evaluation of Subordinates' Work Quality (September 10, 2009). Auditing: A Journal of Practice & Theory, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1471682 or http://dx.doi.org/10.2139/ssrn.1471682

Hun-Tong Tan (Contact Author)

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore
+65 6790 4819 (Phone)
+65 6793 7956 (Fax)

Premila Gowri Shankar

Nanyang Technological University (NTU) - Division of Accounting ( email )

Nanyang Business School
Singapore, 639798
Singapore

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