The Effects of Psychological Ownership on Specialists’ Judgments and Communication in Audit Teams

• In Event: Specialists, Audit Materiality & Complex Estimates

Abstract

Audit teams increasingly rely on specialists, yet auditors sometimes inadequately take specialists’ work into consideration when making their judgments. We approach this problem by considering how to improve specialists’ judgments and communication to the audit team. Specifically, in an experiment with MBA students placed in the role of a specialist within a team, we examine how psychological ownership—the feeling that something is one’s own—affects these specialists’ judgments and communication with their team leader. We find that specialists with higher psychological ownership make higher quality judgments, as evidenced by identifying issues seeded within the case more often, and communicating those issues more proactively. Moreover, psychological ownership affects specialists’ responses to subsequent suggestions from the team leader, which vary in justification strength, indicating that higher ownership may prevent specialists from being unduly influenced by the audit team’s preferences. We contribute to research in auditing and psychology by demonstrating that psychological ownership influences communication choices through its effect on cognition and judgment. We contribute to auditing research and practice by approaching the issue of auditors’ inadequate use of specialists’ work through a focus on the behavior of specialists, rather than auditors.

Authors

• Tim David Bauer, University of Illinois-Urbana-Champaign

• Cassandra Ruth Estep, Emory University

• Emily Elaine Griffith, University of Wisconsin-Madison