Counteracting the Directional Influence of Incentives on Auditor Judgment

Research output: Working paper


Auditing standards require auditors to be objective in their judgment. However, incentives in the audit environment motivate auditors to prefer a particular audit conclusion over others, undermining auditor objectivity. In this study, I examine the effects of two interventions on the directional influence of incentives on auditors’ judgment. I predict and find that increasing the salience of auditors’ intrinsic motivation for their job counteracts the directional influence of incentives on auditor judgment. I further show that the counteracting effects are achieved through auditors’ information processing: auditors with salient intrinsic motivation search for relatively more information that contradicts their incentive-preferred audit conclusion and evaluate the information as relatively less supportive of their incentive-preferred audit conclusion than do auditors in the control conditions. On the other hand, I do not find evidence that holding auditors accountable according to auditing standards reduces the directional influence of incentives on auditors’ information evaluation (consistent with my prediction) or information search (contrary to my prediction). The results of this study indicate that salient intrinsic motivation that focuses auditors on intrinsic aspects of audit tasks is a promising means of mitigating the negative impact of directional incentives on audit quality, a challenging issue that has consistently concerned regulators, practitioners, and academics.
Original languageEnglish (US)
StatePublished - Mar 6 2018


  • directional incentives
  • intrinsic motivation
  • Motivated reasoning
  • accountability
  • information search
  • information evaluation


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