Juror Evaluations of Auditor Decision Aid Use under Rules-Based and Principles-Based Frameworks

Auditors use decision aids to achieve various objectives of their audit engagements. Decision aid use can be scrutinized by juries if auditors are sued for negligence in civil litigation. Lowe, Reckers, and Whitecotton (2002) investigate how juries perceive auditors‟ decisions to either not obtain, override, or follow the recommendations of available decision aids. They find that auditors are assigned more responsibility when they override decision aid recommendations and less responsibility when they follow decision aid recommendations. I replicate their study and find similar results. Additionally, I extend their work by investigating how jury perceptions change under rules- and principles-based accounting standards. Although I do not find significant differences between the two accounting frameworks, there are indications that the lack of findings may be them result of a lack of power. Future research would benefit from further studies of jurors‟ perceptions of auditor decision aid use under rules- and principles-based standards