How do Relative Performance Evaluation and Auditors' Social Bonds Influence Auditors' Peer-to-Peer Knowledge Sharing?

• In Event: The Influence of Managers and Other Auditors in Audit-Related Decisions

Abstract

We examine whether auditors limit the knowledge they share with peers when they face relative performance evaluations (RPE) and whether this effect depends on the strength of auditors’ social bonds with their peers. Knowledge sharing is a critical component to successful audits. That is, audits are more successful when up-skilled auditors share skill-related knowledge with their peers. Drawing on economic and social identity theories, we predict that up-skilled auditors who face RPE will protect their competitive advantage by reducing their knowledge sharing. However, we expect that stronger social bonds among auditors will increase knowledge sharing and curb the counterproductive effect of RPE. Using an abstract laboratory experiment, we provide evidence in support of our predictions. We also find that auditors facing RPE reduce knowledge sharing more when the information at hand is more threatening to their competitive advantage, providing additional support for our theory.

Authors

• Kendall O Bowlin, The University of Mississippi

• Margaret H Christ, University of Georgia

• Emily Kathryn Hornok, Baylor University

• Christy Sims Nielson, The University of Mississippi