Can Auditors Pursue Firm-Level Goals Nonconsciously on Audits of Complex Estimates? An Examination of the Joint Effects of Tone at the Top and Management's Specialist

• 成果类型: Article
• 署名作者: Pyzoha, Jonathan S.; Taylor, Mark H.; Wu, Yi-Jing
• 署名单位: University System of Ohio; Miami University; State University System of Florida; University of South Florida; Texas Tech University System; Texas Tech University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/tar-2016-0223
• 发表日期: 2020
• 页码: 367-394
• 关键词: fair value measurements; professional skepticism; INTERNAL CONTROL; client pressure; error climate; judgments; DECISION; task; performance; KNOWLEDGE

摘要

We examine whether tone at the top emphasizing firm-level commercial, audit quality, or both goals (balanced) can nonconsciously affect auditors' engagement-level tendency to accept management's estimates, and whether the effects differ if management engages a specialist. This study is motivated by academics' and regulators' increasing attention on firm-level tone at the top and concerns about management bias in audited estimates, especially when the evidence is prepared by management's specialist. We find firm-level goals can be pursued nonconsciously by auditors when performing a complex task. When management's specialist is absent, a balanced approach reduces auditors' tendency to agree with management's estimate compared to a commercial approach; however, it is less effective when management's specialist is present. We find an audit quality approach reduces auditors' tendency to accept management's estimate compared to a commercial approach, regardless of the absence/presence of a specialist. Our results have important implications for regulators and audit firms.