How Partners' Views Influence Auditor Judgment

31 Pages Posted: 29 Jul 2011

See all articles by Marietta Peytcheva

Marietta Peytcheva

Lehigh University

Peter R. Gillett

Rutgers, The State University of New Jersey - Accounting & Information Systems

Date Written: July 27, 2011

Abstract

Prior research has shown that auditors who learn superiors’ views before making their own judgment are influenced by them (e.g., Peecher 1996; Tan et al. 1997; Cohen and Trompeter 1998; Brown et al. 1999; Wilks 2002). We use the theory of motivated reasoning (Kunda 1990, 1999) to examine the malleability of individual auditors’ judgments after auditors have reached their own independent conclusions. In a between-subjects experiment with practicing auditors and audit students, we find that auditors who learn the views of their superiors after reaching their own judgment subsequently report that their original, independent judgment had been the same as that of their superiors. Our findings provide evidence that knowledge of superiors’ views biases auditors’ reports of their prior independent judgments, potentially inhibiting discussion and resolution of contrary views. Moreover, in our study this bias is not significantly different from the influence superiors’ views have on auditors who learn those views prior to reaching their own conclusions. We discuss the implications of these findings for audit practice.

Keywords: audit judgment, motivated reasoning, cognitive bias, malleability

JEL Classification: M42

Suggested Citation

Peytcheva, Marietta and Gillett, Peter R., How Partners' Views Influence Auditor Judgment (July 27, 2011). Auditing: A Journal of Practice & Theory, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1896207

Marietta Peytcheva (Contact Author)

Lehigh University ( email )

621 Taylor Street
Bethlehem, PA 18015
United States
610 758 2818 (Phone)
610 758 5992 (Fax)

Peter R. Gillett

Rutgers, The State University of New Jersey - Accounting & Information Systems ( email )

96 New England Avenue, #18
Summit, NJ 07901-1825
United States

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