@article{b405354446624a25a03d849c1f38bd87,
title = "Does Status Equal Substance? The Effects of Specialist Social Status on Auditor Assessments of Complex Estimates",
abstract = "Auditing standards require that auditors{\textquoteright} reliance on a specialist is commensurate with the specialist{\textquoteright}s competence. In assessing competence, auditors encounter cues diagnostic of the specialist{\textquoteright}s social status but less so of competence. In an experiment, we manipulate specialist status and find that auditors mistake status for competence unless they are prompted to separate the constructs. This raises the possibility that auditors could over-rely on high-status specialists. However, auditors also assess high-status specialists as more influential, and when the specialist disagrees with the client, they rely more on high-status specialists because of this perceived influence. Thus, high-status specialists can increase auditors{\textquoteright} willingness to challenge the client by providing a strong ally. Additional analyses suggest that auditors are aware that they rely on the specialist{\textquoteright}s influence rather than competence, indicating that auditors do not use the process that auditing standards envision to evaluate and rely on specialists.",
keywords = "advice, auditing complex estimates, specialists, status",
author = "Anna Gold and Kathryn Kadous and Justin Leiby",
note = "We thank Richard C. Hatfield (editor), two anonymous reviewers, Joe Brazel, Kyle Broderick, Eric Condie, Ryan Guggenmos, Scott Jackson, Sarah Judge, Tamara Lambert, Bob Libby, Leonard Liu, Nikki MacKenzie, Kathy Rupar-Wang, Steve Salterio, Matias Sokolowski, Matt Sooy, Jane Thayer, Ralph Ter Hoeven, Herman van Brenk, Jeff Wilks, Aaron Zimbelman, and workshop participants at Brigham Young University, Chapman University, Cornell University, Georgia Institute of Technology, Lehigh University, Northeastern University, Western University, University of Nebraska\u2013Lincoln, The University of New Mexico, University of North Texas, and University of South Carolina, and the European Network for Experimental Accounting Research for helpful comments and suggestions on prior drafts. We also thank participants at the 2019 European Auditing Research Network Conference and the 2019 and 2023 Foundation for Audit Research Conferences. We are grateful to the audit firms providing us access to participants. The research was partially funded and participants were provided by the Foundation for Auditing Research (FAR) and we thank the FAR [Grant 2017B05]. FAR supports independent academic research with a goal of improving audit quality. The authors of this publication have no conflicts of interest related to this research.",
year = "2024",
month = sep,
doi = "10.2308/TAR-2021-0298",
language = "English (US)",
volume = "99",
pages = "197--222",
journal = "Accounting Review",
issn = "0001-4826",
publisher = "American Accounting Association",
number = "5",
}