The Effects of First Impressions and Supervisor Preference on Auditors’ Risk Assessments

• In Event: The Impact of Management Communication and Impressions on the Audit

Abstract

This study examines how first impressions and supervisor preference for effectiveness or efficiency influence auditors’ risk assessments. Auditors form first impressions as they interact with client personnel while gathering audit evidence. Prior first-impression research suggests that individuals’ first impressions influence their subsequent judgments through a subconscious process that makes it difficult to avoid biased judgments associated with them. In a typical auditing context, in which the time pressures of the auditing environment may induce a focus on efficiency, we expect a positive (negative) first impression to decrease (increase) auditor objectivity and cause auditors to become less (more) sensitive to misstatement risk. Our findings from an experiment with practicing auditors support this expectation. Importantly, we extend prior psychology research that suggests first impression biases are difficult to avoid and find that the effects of first impressions are mitigated when an audit supervisor expresses a preference for audit effectiveness. Given that client inquiry is an important component of the audit, these findings have important implications for auditor effectiveness.

Authors

• Darin Kip Holderness, West Virginia University

• Alyssa Sui Jing Ong, West Virginia University

• Mark Foster Zimbelman, Brigham Young University