Bridging Social Mismatches: Understanding Alumni Affiliation’s Effects on Auditor Evidence Collection

• In Event: Auditor Independence

Abstract

Regulators and researchers express concern about auditors who leave their firms for employment at their clients, due to lingering relationships which might represent a threat to auditor independence and negatively impact audit quality through undue influences of the client personnel on auditor judgment. We examine a potential benefit of these relationships during evidence collection. Understanding the effects of alumni affiliation on evidence collection is important because if issues are not discovered at this phase, they are likely to go unaddressed, potentially hurting audit quality. Contrary to most research findings, we find that alumni affiliation benefits the audit by reducing perceived social mismatch, increasing auditors’ evidence collection. Additionally, we find that when auditors become fatigued, the benefits of alumni affiliation diminish as auditors over-rely on the relationship, leading them to prematurely cease evidence collection.

Authors

• Christine Earley, Providence College

• Stephen Kuselias, Providence College

• Nikki MacKenzie, Georgia Institute of Technology