The Role of Case Merits in Audit Litigation: Interview Evidence

44 Pages Posted: 10 Apr 2020 Last revised: 26 May 2021

See all articles by Eldar Maksymov

Eldar Maksymov

Arizona State University (ASU) - School of Accountancy

Mark E. Peecher

University of Illinois at Urbana-Champaign; University of Illinois College of Law

Jeffrey S. Pickerd

The University of Mississippi

Yuepin (Daniel) Zhou

University of Illinois at Urbana-Champaign - Department of Accountancy

Date Written: March 16, 2020

Abstract

Prior research is unclear on the role of case merits in resolution of legal audit disputes. Using the Elaboration Likelihood Model (ELM) as a lens, we examine their role based on interviews of 42 audit litigation attorneys and trial consultants. Our results indicate that the role of case merits systematically differs between the two sides of audit litigation. Auditors’ (plaintiffs’) litigators believe they can achieve favorable outcomes by increasing the role of merit-relevant (merit-irrelevant) information in juror resolutions using trial venues, jurors, arguments, and argument delivery tactics. Litigators emphasize that this difference arises from the unique features of audit litigation. Our results validate a framework we developed based on ELM. The framework outlines how litigators believe they could increase the likelihood that jurors will use merit-relevant (merit-irrelevant) information in case resolutions. We discuss implications and suggest multiple venues for future research.

Keywords: audit litigation, litigators, case merits, Elaboration Likelihood Model

JEL Classification: M4, M42, K22, K41

Suggested Citation

Maksymov, Eldar M. and Peecher, Mark E. and Pickerd, Jeffrey Scott and Zhou, Yuepin, The Role of Case Merits in Audit Litigation: Interview Evidence (March 16, 2020). Available at SSRN: https://ssrn.com/abstract=3555475 or http://dx.doi.org/10.2139/ssrn.3555475

Eldar M. Maksymov (Contact Author)

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

Mark E. Peecher

University of Illinois at Urbana-Champaign ( email )

Gies College of Business
1206 South Sixth Street
Champaign, IL 61820
United States
217-333-4542 (Phone)
217-244-0902 (Fax)

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States

Jeffrey Scott Pickerd

The University of Mississippi ( email )

University, MS 38677
United States

Yuepin Zhou

University of Illinois at Urbana-Champaign - Department of Accountancy ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

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