Auditors often receive summary information or conclusions from management about account balances or internal controls. They must then gather evidence to assess whether this information is fairly stated. In such situations, management can be considered the first mover and the auditor the second...

We start from the observation that auditors have discretion to order their tasks and investigate whether auditors use their task discretion to prioritize easy over difficult tasks and to reduce more effort in difficult tasks. Drawing on Conservation of Resources theory, which states that humans...

This paper reports the results of four laboratory experiments designed to examine whether an appropriate legal system, which is a combination of legal regime (strict vs. negligence) and damage apportionment rule (joint-and-several vs. proportionate), may serve as an effective mechanism to...

Auditors are the gatekeepers to the public securities markets and their independence is central to the effectiveness of auditors as gatekeepers. Our general interest is on independence and we investigate how financial and non-financial incentives affect choices made by an auditor-gatekeeper...

I report the results of an experiment designed to investigate the influence of noncredible communications and group affiliation on the formation of self-serving bias in an auditing trust game. I find that manager-subjects use noncredible communications (i.e., a message communicating their intent...

We design an experiment to examine the influence of prior audit experience on subsequent reporting decisions when auditors become managers of audited firms. In contrast to the independence issues that can arise when auditors and their clients are related by prior affiliation, we focus this study...

At present, ways to improve audit quality and auditing decisions are intensively being discussed worldwide by standard setters and researchers. Audit quality is mainly influenced by two factors the requirements of standard setters and the professional judgment of auditors. Especially the...

I provide theory-based causal evidence on the effects of risk-based regulatory inspections, modeled after the PCAOB's, on auditor behavior in a multi-client setting where clients with relatively higher misstatement risk (“higher-risk” clients) have a higher risk of being inspected than...

In this paper, we report the design and results of an experiment in human judgment in which decision makers were allowed to choose the information cues they used in making their judgments. The results of this study show that the subjects' choice of information, rather than their processing of...

This research aims to examine empirically the overreliance on representativeness heuristic and anchoring-adjustment influences experienced by investors in forecasting future earnings. This research was a laboratory experiment with a design of 2x2 full factorial between subject. The results...