Do Auditor Advocacy Attitudes Impede Audit Objectivity?
Department
School of Accountancy
Document Type
Article
Publication Date
1-1-2017
Embargo Period
11-6-2017
Abstract
Biased evaluation of evidence exists when an auditor either over-emphasizes evidence that supports management assertions or over-emphasizes evidence against management assertions. This study examines if an auditor’s advocacy attitudes lead to bias in information search for audit evidence. We measure the range of advocacy attitudes of individual auditors and hypothesize that auditors at either end of the advocacy spectrum may impede the objectivity of evidence gathered. Results from 60 Big 4 auditors indicate that advocacy attitudes affect both initial judgments and consequent search strategies of auditors. When initial judgments are client-favorable, all auditors exhibit search strategies focused on finding evidence to take a more conservative position; however, when initial judgments represent an unfavorable client position, auditors with lower advocacy attitudes exhibit a stronger tendency to search for additional evidence against a client-favorable position, consistent with a confirmation bias. Conversely, auditors with more neutral attitudes plan a more objective search effectively mitigating the bias. Aggregate findings establish an important link between bias and information search that may manifest itself in auditor training procedures and be of interest to auditing regulators.
Journal Title
Journal of Accounting, Auditing and Finance
Journal ISSN
0148-558X
Volume
32
Issue
1
First Page
136
Last Page
151
Digital Object Identifier (DOI)
10.1177/0148558X16641862