The Impact of Audit Evidence Documentation on Jurors' Negligence Verdicts and Damage Awards

• 成果类型: Article
• 署名作者: Backof, Ann G.
• 署名单位: University of Virginia
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51072
• 发表日期: 2015
• 页码: 2177-2204
• 关键词: COUNTERFACTUAL THINKING; trial complexity; culpable control; Hindsight bias; DECISION; Blame; RESPONSIBILITY; PSYCHOLOGY; QUALITY

摘要

Audit workpapers play a key role in auditor negligence trials, yet little is known about how workpaper documentation affects jurors' decision making. I investigate how auditors' documentation of their consideration of the alternative accounting treatments and their risk-based audit approach influence jurors' negligence verdicts and damage awards. I find that documentation of their consideration of the accounting alternatives increases the likelihood that auditors are found negligent because it increases jurors' perceptions of the foreseeability of the misstatement. However, when combined with documentation that explicitly links the audit risks to the work performed to address each risk, jurors award lower damage awards because they perceive auditors' actions prior to the negligent act as more compliant with the auditing standards. My results highlight the consequences of more complete documentation on jurors' evaluations of auditors and suggest the need for documentation policies that more effectively communicate the appropriateness of auditors' professional judgments.