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This study provides evidence on how audit firms’ decisions to use off-shore (outsourced) auditors or to assign on-site (local) auditors extensive overtime affects perceptions of auditor culpability and legal liability in instances of “failed audits.” We conduct a behavioral experiment in which 69 MBA students (with an average age of 29) responded to a hypothetical audit lawsuit. The results suggest auditors may be penalized during the litigation process depending on the extent of overtime or off-shoring and the dispositional affective states of the assessor.