The Impact of Audit Firm Signature on Jury Perception of Negligence

• In Event: Auditing 3

Abstract

Recent discussion of a possible change in regulation regarding the way audit opinions are signed has spurred a heated debate in the US. Audit firms do not support changing the audit opinion signature method to require the individual audit partner to sign their own name instead of allowing them to sign the firm’s name to the opinion. Audit firms argue that requiring the partner to sign their name to the opinion will increase liability. Our results support that argument. When examining assessed jury negligence for both the partner and the firm, jury’s perception of negligence is higher when the partner signs their name to the audit opinion than when they sign their firm’s name. This study also examined the effect of firm size on jury perception of negligence but did not find it to be significant.

Authors

• Aaron Wilson, Ohio University

• Michael Chapman, Ohio University