Auditor Judgments: The Effects of the Partner's Views on Decision Outcomes and Cognitive Effort

Posted: 2 Jul 2013

See all articles by Karim Jamal

Karim Jamal

University of Alberta - Department of Accounting, Operations & Information Systems

Date Written: June 1, 1996

Abstract

There are political, social and economic incentives embedded within the audit setting which provide stimuli for compliant behavior of subordinate auditors to that preferred by the superior auditor. This study examines this compliant behavior under conditions of accountability. Specifically, this study examines whether subordinate auditors, when they are held accountable for their decisions, align their views with those expressed by the evaluative audience;emtheir superiors. In addition, the degree of cognitive effort associated with this compliance is examined. An experiment involving 70 auditors from one Big 6 firm required the subjects to complete a preliminary risk assessment of inventory obsolescence for five separate inventory items. All auditors were informed that they might have to verbally justify their decision outcomes to the partner and/or the researchers. The risk assessments of the auditors' superior were manipulated. Generally, the risk assessments of the superior significantly influenced the subordinates' risk assessments and the amount of cognitive effort exerted by the subordinate, accountable auditors.

Suggested Citation

Jamal, Karim, Auditor Judgments: The Effects of the Partner's Views on Decision Outcomes and Cognitive Effort (June 1, 1996). Behavioral Research in Accounting, Vol. 9 sup, 1997, University of Alberta School of Business Research Paper No. 2013-1038, Available at SSRN: https://ssrn.com/abstract=2279053

Karim Jamal (Contact Author)

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada
780-492-5829 (Phone)
780-492-3325 (Fax)

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