The Impact of Positive and Negative Mood on the Hypothesis Generation and Ethical Judgments of Auditors

This paper examines the impact of mood on the hypothesis generation and ethical judgments of auditors. Prior psychology research documents different effects of negative and positive mood on information processing such that negative (positive) mood leads to more systematic (heuristic) processing (e.g...

Full description

Saved in:
Bibliographic Details
Published in:Auditing : a journal of practice and theory 2009-11, Vol.28 (2), p.119-144
Main Authors: Cianci, Anna M., Bierstaker, James Lloyd
Format: Article
Language:English
Subjects:
Accounting
Auditors
Audits
Decision making
Emotions
Ethics
Experiments
Hypotheses
Impact analysis
Influence
Information processing
Judgment
Professional ethics
Psychological aspects
Public companies
Studies
Turnover
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper examines the impact of mood on the hypothesis generation and ethical judgments of auditors. Prior psychology research documents different effects of negative and positive mood on information processing such that negative (positive) mood leads to more systematic (heuristic) processing (e.g., Forgas 1995a; Bless 2000). Theoretical accounting research (Gaudine and Thorne 2001) proposes a positive relation between positive mood and ethical decision-making. Based on this research, we predict that negative (compared with positive) mood will enhance performance on a hypothesis generation task and impair performance on two ethical tasks. These predictions are tested in an experiment in which auditors perform an analytical procedures task involving the generation of explanations for fluctuations in financial ratios and two ethical tasks involving the truthful reporting of information. Consistent with predictions, the results show that auditors' judgments are influenced by their mood state. Specifically, auditors in a negative (compared with a positive) mood generated more correct explanations for fluctuations in financial ratios, but made less ethical judgments. The implications of these results are discussed, and suggestions for future research are offered.
ISSN:0278-0380
1558-7991
DOI:10.2308/aud.2009.28.2.119