Can directors' self-interests influence accounting choices?

Eighty-eight audit committee members participated in an experiment designed to investigate the effects of audit issue (adjustment versus restatement) and director status (single directorship versus multiple directorships) on the likelihood of accepting an auditor's recommendation. Results indic...

Full description

Saved in:
Bibliographic Details
Published in:Accounting, organizations and society organizations and society, 2008-10, Vol.33 (7), p.783-800
Main Authors: Hunton, James E, Rose, Jacob M
Format: Article
Language:English
Subjects:
Adaptation to change
Attitudes
Audit committees
Auditing
Auditors reports
Board of directors
Business accounting
Business reputation
Directors
Financial restatements
Senior management
Studies
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Eighty-eight audit committee members participated in an experiment designed to investigate the effects of audit issue (adjustment versus restatement) and director status (single directorship versus multiple directorships) on the likelihood of accepting an auditor's recommendation. Results indicate that all participants are less likely to accept an auditor's restatement recommendation than adjustment recommendation. Further, directors holding multiple directorships are less likely to accept an auditor's restatement recommendation than directors with a single directorship. Analysis of post-experiment clinical debriefing items indicates that directors with multiple directorships are less willing to support restatements due to the potential adverse effects of restatements on their reputation capital.
ISSN:0361-3682
1873-6289
DOI:10.1016/j.aos.2007.10.001