Friends in Low Places: How Peer Advice and Expected Leadership Feedback Affect Staff Auditors’ Willingness to Speak Up

Accounting, Organizations and Society, 87(8):1-16.

52 Pages Posted: 19 Mar 2019 Last revised: 12 Feb 2021

See all articles by Emily E. Griffith

Emily E. Griffith

University of Wisconsin - Madison

Kathryn Kadous

Emory University - Goizueta Business School

Chad A. Proell

University of North Texas- Ryan College of Business -Department of Accounting

Date Written: May 26, 2020

Abstract

Junior auditors collect the bulk of audit evidence, yet they do not always speak up to communicate potentially important audit issues. Such inappropriate “voice” decisions can endanger audit quality. We examine whether and how staff auditors influence each other in making voice decisions. First, a survey provides descriptive evidence that staff auditors consult their peers for advice on whether to speak up. Next, two experiments provide evidence that voice advice among peers at the staff level can be problematic. We find that staff auditors consistently underestimate the importance of raising issues compared to their supervisors, and they rely on social cues that are not diagnostic of issue importance in giving voice advice to peers. Finally, we predict and find that staff auditors tend to follow peer advice when it confirms their initial stance, and that an expectation of high (versus low) quality supervisor feedback increases their willingness to speak up. Most importantly, we find that contradictory peer advice only influences staff auditors’ willingness to speak up when leadership feedback is not expected to be of high quality. Together these results indicate that staff auditors seek out and follow voice advice from their peers, but appropriate leadership feedback practices can mitigate the negative impact of peer advice on upward communication.

Keywords: Audit teams, information sharing, feedback, employee voice, experiment, survey, peer advice

JEL Classification: M41, M42

Suggested Citation

Griffith, Emily Elaine and Kadous, Kathryn and Proell, Chad A., Friends in Low Places: How Peer Advice and Expected Leadership Feedback Affect Staff Auditors’ Willingness to Speak Up (May 26, 2020). Accounting, Organizations and Society, 87(8):1-16., Available at SSRN: https://ssrn.com/abstract=3342787 or http://dx.doi.org/10.2139/ssrn.3342787

Emily Elaine Griffith

University of Wisconsin - Madison ( email )

School of Business
975 University Avenue
Madison, WI 53706
United States

Kathryn Kadous (Contact Author)

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States
404-727-4967 (Phone)

Chad A. Proell

University of North Texas- Ryan College of Business -Department of Accounting ( email )

College of Business Administration
P.O. Box 305219
Denton, TX 76203
United States

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