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The effects of trust and management incentives on audit committee judgments

Citation

Rose, A and Rose, J and Dibben, MR, The effects of trust and management incentives on audit committee judgments, Behavioral Research in Accounting, 22, (2) pp. 87-103. ISSN 1050-4753 (2010) [Refereed Article]


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Copyright Statement

Copyright 2010 American Accounting Association

Official URL: http://scitation.aip.org/bria/

DOI: doi:10.2308/bria.2010.22.2.87

Abstract

We investigate the effects of audit committee members' dispositional trust and management incentives on audit committee judgments. Results of an experiment indicate that: (1) When management has incentives to manage earnings, less trusting audit committee members are more likely to support the external auditor than are more trusting audit committee members; (2) when management has incentives to manage earnings, less trusting audit committee members are more likely to perceive that management is not credible, and more likely to perceive that management is being deceptive than are more trusting audit committee members; and (3) the interactive effects of trust and incentives on decisions to support the auditor are mediated by perceptions of management's intent to deceive. That is, less trusting audit committee members perceive that management's incentives to manage earnings result in potential deception by management, and less trusting audit committee members increase their support for the auditor because of concerns about management deception.

Item Details

Item Type:Refereed Article
Research Division:Commerce, Management, Tourism and Services
Research Group:Accounting, Auditing and Accountability
Research Field:Auditing and Accountability
Objective Division:Expanding Knowledge
Objective Group:Expanding Knowledge
Objective Field:Expanding Knowledge in Commerce, Management, Tourism and Services
Author:Dibben, MR (Associate Professor Mark Dibben)
ID Code:66460
Year Published:2010
Deposited By:Management
Deposited On:2011-01-27
Last Modified:2015-01-20
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