Effects of Technical Department's Advice, Quality Assessment Standards, and Client Justifications on Auditors' Propensity to Accept Client-Preferred Accounting Methods

• 成果类型: Article
• 署名作者: Ng, Terence Bu-Peow; Shankar, Premila Gowri
• 署名单位: Nanyang Technological University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2010.85.5.1743
• 发表日期: 2010
• 页码: 1743-1761
• 关键词: DECISION-MAKING; determinants; incentives; JUDGMENT; earnings; task

摘要

We conduct an experiment to investigate whether the effects of an SAS No. 90-like quality assessment standard (QAS) on auditors' decision to accept a client-preferred accounting method is jointly moderated by the nature of advice from an audit firm's technical department and the strength of the client's justification. Results indicate that, in the absence of advice, the presence of QAS does not affect auditors' decision, regardless of client justification strength. However, in the presence of advice from the technical department, the presence of QAS significantly reduces auditors' propensity to accept the client-preferred method, but only when the advice explicitly recommends the use of the most appropriate method and the client's justification is strong. These findings demonstrate the complementary roles that professional standards and audit firms' technical departments play in enhancing the quality of auditors' decisions, and indicate that the nature of advice matters.