The Impact of Competing Goals, Experience, and Litigation Consciousness on Auditors' Judgments

14 Pages Posted: 8 Oct 2009

See all articles by Stephen Kwaku Asare

Stephen Kwaku Asare

University of Florida - Fisher School of Accounting

Anna M. Cianci

Drexel University - Department of Accounting and Tax

George T. Tsakumis

University of Delaware - Alfred Lerner College of Business and Economics

Abstract

This study uses an experiment to examine the interactive effect of goals and experience on auditors' inventory write-off assessments and the role of litigation consciousness in mediating this effect. We find that when presented with a competing compliance and client relations goal, more experienced auditors were more likely to recommend an inventory write-off than less experienced auditors. However, when presented with only a compliance goal, auditors were equally likely to recommend an inventory write-off. The finding that less experienced auditors are more influenced by client relations goals suggests that the early socialization into the profession may be dominated by client relations concerns rather than litigation concerns. Mediation results suggest that auditors' litigation consciousness is a significant mechanism which helps drive the interactive effect of goals and experience on auditors' inventory write-off assessments. Implications for research, practice, and regulation are discussed.

Suggested Citation

Asare, Stephen Kwaku and Cianci, Anna M. and Tsakumis, George T., The Impact of Competing Goals, Experience, and Litigation Consciousness on Auditors' Judgments. International Journal of Auditing, Vol. 13, No. 3, pp. 223-236, November 2009, Available at SSRN: https://ssrn.com/abstract=1485795 or http://dx.doi.org/10.1111/j.1099-1123.2009.00389.x

Stephen Kwaku Asare

University of Florida - Fisher School of Accounting ( email )

Warrington College of Business
PO Box 117166
Gainesville, FL 32611-7166
United States
352-392-5860 (Phone)

Anna M. Cianci

Drexel University - Department of Accounting and Tax ( email )

Philadelphia, PA 19104
United States

George T. Tsakumis

University of Delaware - Alfred Lerner College of Business and Economics ( email )

419 Purnell Hall
Newark, DE 19716
United States

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