https://doi.org/10.2308/bria-2022-031
Journal: Behavioral Research in Accounting, 2024, №1, p.67-84
See Also
756 Normandie Ave Unit 108, Los Angeles, CA 90005 - 0 beds/1 baths3665 McLaughlin Ave Unit 07, Los Angeles, CA 90066 - 1 beds/1 baths909 Ala Lilikoi St #507, Honolulu, HI 96818 - Movoto909 Kaheka St #B307, Honolulu, HI 96814 | 1 photo - MovotoPublisher: American Accounting Association
Authors: Jorien Louise Pruijssers, Marcel van Rinsum
Abstract
ABSTRACT We examine how client importance affects judgment conservatism depending on auditors’ career concerns. We argue that auditors will interpret being assigned to a client of major importance as a more powerful signal of their promotion chances under strong competition than under weak competition for advancement and, hence, that they will consider their promotion opportunities to a greater extent in their judgments. We therefore predict that auditors exhibit more conservatism in their judgments regarding more important clients when competition for advancement is strong but not when it is weak. Using an experiment, we generally find results in line with this prediction. Unexpectedly, yet interestingly, we also find that less important clients are judged less conservatively under strong competition than under weak competition for advancement. Data Availability: Contact the authors. JEL Classifications: M42; M52.
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