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Does Identification with the Firm and Profession Mitigate Outcome Effect on Auditors’ Decisions?

Author

Listed:
  • Anna J. JOHNSON-SNYDER

    (East Carolina University, U.S.A.)

  • Brenda L. KILLINGSWORTH

    (East Carolina University, U.S.A.)

Abstract

The paper examines whether auditors’ identification with the organization or with the profession will influence the use of outcome knowledge when reviewing audits. In addition, the study examines whether the conflict between organizational identity and professional identity influences evaluators’ use of outcome knowledge. The study participants consisted of 63 auditing experts in managerial ranks. Auditors completed an instrument containing randomized audit review scenarios developed to evaluate the effects of identification and outcome knowledge on decisions. Results showed that organizational identification can minimize the effect of outcome knowledge on decisions while professional identification results in an increase in biases.

Suggested Citation

  • Anna J. JOHNSON-SNYDER & Brenda L. KILLINGSWORTH, 2020. "Does Identification with the Firm and Profession Mitigate Outcome Effect on Auditors’ Decisions?," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 18(159), pages 532-532.
    • Handle: RePEc:aud:audfin:v:18:y:2020:i:159:p:532
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    References listed on IDEAS

    as
    1. Jennings, Marianne M. & Lowe, D. Jordan & Reckers, Philip M. J., 1998. "Causality as an influence on hindsight bias: An empirical examination of judges' evaluation of professional audit judgment," Journal of Accounting and Public Policy, Elsevier, vol. 17(2), pages 143-167.
    2. Herda, David N. & Lavelle, James J., 2011. "The effects of organizational fairness and commitment on the extent of benefits big four alumni provide their former firm," Accounting, Organizations and Society, Elsevier, vol. 36(3), pages 156-166, April.
    3. Mark E. Peecher & M. David Piercey, 2008. "Judging Audit Quality in Light of Adverse Outcomes: Evidence of Outcome Bias and Reverse Outcome Bias," Contemporary Accounting Research, John Wiley & Sons, vol. 25(1), pages 243-274, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    auditor judgement; organizational identification; professional identification; organizational-professional conflict; outcome knowledge; audit;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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