Does Audit Opinion Signature Method Matter? It Does if You are Concerned with Credibility

• In Event: Audit and AIS

Abstract

Discussion in the US by the PCAOB of a possible change in regulation regarding the way audit opinions are signed as well as the implementation of the IAASB’s ISA 700 (revised) has spurred a heated debate within the audit field as to the merits of mandatory audit firm signature by the audit partner. Generally, the audit firms (championed by the AICPA) do not support changing the signature method in the US to require the individual audit partner to sign their own name instead of allowing them to sign the firm’s name to the opinion. When examining jury perceived credibility for the firm, jury’s perception of credibility is significantly higher when the partner signs the firm’s name to the audit opinion than when they sign their own name. In regards to perceived partner credibility, there is not a significant difference between signature methods. Finally, this study examined the effect of firm size on jury perception of credibility and found large firms to be considered significantly more credible than small firms.

Authors

• Aaron Wilson, Ohio University

• Michael Chapman, Ohio University