A perplexing yet persistent empirical finding is that individuals assess probabilities in words and in numbers nearly equivalently, and theorists have called for future research to search for factors that cause differences. This study uses an accounting context in which individuals are commonly...

This study examines an aspect of earnings management that we refer to as audit management. We define audit management as a client’s strategic use of diversions to decrease the likelihood that auditors will discover earnings management during the audit. Specifically, we examine whether...

Individuals judge audit quality, in part, based on adverse outcome information. Assuming that individuals over-rely on outcomes, prior accounting research attempts to improve their judgments by reducing their reliance on outcome information. Logically, however, individuals could either over-rely...

Considerable auditing research shows that individuals exhibit outcome effects when judging audit quality: They judge auditor negligence as more likely when given information about adverse audit outcomes. Many studies conclude that outcome information biases individuals against auditors, and/or...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>Although the financial statements of an organization are considered a product of management, prior research suggests that a company's financial statements may be affected by the negotiation strategy employed by the auditor when resolving audit differences with management. However, little...