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The effects of trust and management incentives on audit committee judgments

journal contribution
posted on 2023-05-17, 04:16 authored by Rose, A, Rose, J, Dibben, MR
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.

History

Publication title

Behavioral Research in Accounting

Volume

22

Pagination

87-103

ISSN

1050-4753

Department/School

TSBE

Publisher

American Accounting Association

Place of publication

USA

Rights statement

Copyright © 2010 American Accounting Association

Repository Status

  • Restricted

Socio-economic Objectives

Expanding knowledge in commerce, management, tourism and services

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