The effects of source of accountability, knowledge of views, and personal consequences on effort and accounting judgments

Date of Completion

January 2006

Keywords

Business Administration, Accounting|Psychology, Industrial

Degree

Ph.D.

Abstract

Research in accounting and psychology predicts that accountability should impact decision behavior by inducing greater effort by the decision maker when the source's views are unknown. Often, decision makers have more than one source to which they are accountable. While the literature does evaluate whether different sources' views will impact effort and accountability, it has not done so when consequences are revealed and in particular has not considered the impact of the Public Company Accounting Oversight Board (PCAOB) on behavior. ^ This dissertation finds that knowledge of source's views impacts the level of effort exerted by auditors in making judgments regarding the valuation of receivables and inventory. When auditors knew the source's views regarding the valuation, they exerted less effort than when the views were unknown, although their judgments did not necessarily converge to the source's view. This effect of knowledge of the source's view persisted whether the source was the client or the PCAOB, and whether the auditor faced personal consequences of the decision. ^

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