Trusting/Distrusting International Auditors’ Opinion

• In Event: Trust, Human Resources, International Aid and Reporting Quality
  In Paper Session: Trust, Human Resources, International Aid, and Reporting Quality

Abstract

Trust relations are important for effective international exchanges between auditors (trustees) and market participants (trustors) such as investors, creditors, customers, and other users of financial statement information. In particular, auditors’ opinion regarding client’s ability to continue in existence is essential to improving social capital in the global economy. Previous literature has shown that the issuance of a qualified audit report with doubts about the viability of a multinational enterprise (MNE) may have imminent consequences for both auditors and financial statement users. We build on previous research by analyzing auditors’ trustworthy behavior regarding this important opinion in a Throughput Model. A number of propositions are forwarded regarding how investors and other users may trust (distrust) auditors’ MNE opinions. In this regard, dominant determinants of six trust positions were used to explain the auditors’, and in turn investors’ and creditors’ decision-making process.

Author

• Waymond Rodgers, University of Hull