Improving Jurors' Evaluations of Auditors in Negligence Cases*

Kathryn Kadous

Contemporary Accounting Research, 2001, vol. 18, issue 3, 425-444

Abstract: Prior research indicates that individuals acting as jurors experience outcome effects in audit negligence litigation. That is, jurors evaluate auditors more harshly in light of negative outcomes, even when audit quality is constant. I posit that outcome effects in this setting are caused by jurors using their negative affect (i.e., feelings) resulting from learning about negative audit outcomes as information relevant to auditor blameworthiness. I tested this hypothesis in an experiment in which I manipulated audit quality, outcome information, and provision of an attribution instruction. The attribution instruction was designed to discredit negative affect as a cue to auditor blameworthiness. Consistent with expectations, attribution participants' evaluations of auditors exhibited less reliance on outcome information and more reliance on audit quality information than did evaluations made by control participants. In fact, outcome effects were eliminated for attribution participants. Courts may be able to improve the quality of jurors' decisions in such cases by employing an attribution instruction.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:wly:coacre:v:18:y:2001:i:3:p:425-444

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