The Effects of Conflicting Messages on Audit Accuracy and Efficiency

• In Event: Continental Breakfast - Research and Education Forum
  In Roundtable Session: Table 12: Auditor Judgment

Abstract

In an increasingly competitive environment, auditors are faced with conflicting messages related to time pressure to finish an audit within an established time budget, while also ensuring a thorough and high quality audit. Most auditing firms have an official policy forbidding lower level auditors from underreporting the time (URT) they spend on an audit. However, middle level managers who are under pressure to meet strict time constraints often implicitly encourage their subordinates to URT to meet the pre-determined time budgets. This experimental study examines how different messages from the audit firm and its managers can have important effects on audit accuracy and efficiency. We find that the presence of conflicting messages results in lower accuracy on audit tasks than when subjects had only the message that firm policy forbade URT. However, such conflicting messages resulted in higher levels of audit efficiency than when subjects were given only the message that firm policy forbade URT. These results indicate the impact that different messages can have on alternative measures of audit performance.

Authors

• Rebecca B. Martin, McNeese State University

• William W. Stammerjohan, Louisiana Tech University

• Andrea R. Drake, Louisiana Tech University