25 Pages Posted: 17 Apr 2017
Date Written: April 15, 2017
This paper exploits the Social Identity Theory and auditing expertise literature to examine jurors’ perceptions of auditor negligence following an alleged audit failure in which an accounting firm provides aggressive tax services (ATS) to the audit client. The study is motivated by Thornton and Shaub’s (2014) assertion that accounting regulators banned registered public accounting firms’ provision of audit and ATS services to audit clients without empirical evidence. This study is also motivated by a void in the literature which has not examined the impact of juror bias in auditor litigation cases. The Social Identity Theory was employed to examine this issue. Contrary to expectations, jurors’ negligence verdicts were not significantly influenced by their perceptions of auditors’ social identity. In a separate analysis consisting of only profession-identifying jurors, accounting firms’ expertise was not significant in their decisions.
Keywords: Social Identity Theory, Tax Avoidance, Auditor Industry Expertise, Auditor Independence
Suggested Citation: Suggested Citation
Wilson, Reginald, The Influence of Jurors' Social Identities on Jurors' Evaluations of Auditor Negligence (April 15, 2017). Available at SSRN: https://ssrn.com/abstract=2953184