The Effect of Accounting Uncertainty and Auditor Reputation on Auditor Objectivity

Autor:	Jeffrey W. Schatzberg, Galen R. Sevcik, Brian W. Mayhew
Rok vydání:	2001
Předmět:	Economics and Econometrics Auditor's report Actuarial science business.industry media_common.quotation_subject Accounting Audit Auditor independence Incentive Business Objectivity (science) Finance Reputation media_common
Zdroj:	AUDITING: A Journal of Practice & Theory. 20:49-70
ISSN:	1558-7991 0278-0380
Popis:	This paper reports results of experimental markets that examine whether accounting uncertainty impacts auditor objectivity in a setting where the auditor also has an incentive to build a reputation for objectivity. While prior research has examined the impact of uncertainty on auditor objectivity, our research is the first to explicitly incorporate auditor reputation into the research design. The results provide strong evidence that accounting uncertainty impacts auditor objectivity despite the damage to auditor reputation. Our markets suggest that in the absence of accounting uncertainty auditors remain objective due to concerns about their reputation with managers and investors. However, in the presence of accounting uncertainty auditors impair their objectivity by misreporting in favor of managers. Our results suggest that regulators should focus on enhancing auditor incentives to maintain objectivity when faced with accounting uncertainty, but do not need to be concerned about auditor objectivity violations when accounting pronouncements provide unambiguous guidance.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::2e5ff344df29a0febaaafdedf836589c https://doi.org/10.2308/aud.2001.20.2.49 Zobrazit plný text záznamu