Is Silence Golden? Audit Team Leader Reactions to Subordinates Who Speak Up 'In the Moment' and at Performance Appraisal

51 Pages Posted: 25 Jun 2016 Last revised: 17 Jan 2018

See all articles by Mark W. Nelson

Mark W. Nelson

Cornell University - Samuel Curtis Johnson Graduate School of Management

Chad A. Proell

TCU - Neeley School of Business

Date Written: January 16, 2018

Abstract

This paper examines audit team leader reactions to auditors who speak up about potentially important audit issues. Study 1 is a survey of interacting audit teams and provides evidence of higher performance evaluations for auditors who speak up. Studies 2, 3, and 4 are experiments examining team leader reactions to speaking up, both at the time speaking up occurs (Study 2) and later during performance evaluation (Studies 2, 3, and 4). Results provide evidence that team leaders react with irritation at the time speaking up occurs, particularly if a team member raises an audit effectiveness issue that could increase audit effort. However, team leaders reward speaking up in performance evaluations, particularly when team members speak up about issues that align with the effectiveness or efficiency focus of the team. While supervisors’ performance evaluations exhibit outcome effects, supervisors also reward speaking up, regardless of outcome.

Keywords: Audit teams, information sharing, audit efficiency, audit effectiveness, auditor performance assessment, survey, experiment.

JEL Classification: M41

Suggested Citation

Nelson, Mark W. and Proell, Chad A., Is Silence Golden? Audit Team Leader Reactions to Subordinates Who Speak Up 'In the Moment' and at Performance Appraisal (January 16, 2018). The Accounting Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2800164 or http://dx.doi.org/10.2139/ssrn.2800164

Mark W. Nelson (Contact Author)

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

448 Sage Hall
Ithaca, NY 14853
United States
607-255-6323 (Phone)
607-254-4590 (Fax)

Chad A. Proell

TCU - Neeley School of Business ( email )

M.J. Neeley School of Business
TCU Box 298530
Fort Worth, TX 76129
United States

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