Affect and accountability in auditor judgment

This paper examines whether auditors' affect toward client management is a source of bias in their fraud likelihood judgments. In addition, it explores whether affect operates as an overall bias or impacts only certain evidence categories in auditors' judgment processes. Affect, defined as a positive or negative emotional evaluation of an object, is operationalized as the likable or dislikable nature of a potential audit client. The study includes accountability and experience as potential moderators to the affective bias because prior research has shown that accountability and experience reduce judgment bias through the decision maker's utilization of an effortful judgment process and task specific knowledge respectively.; In an experiment, professional auditors viewed a video of a likable (dislikable) client, made an overall fraud likelihood judgment and then evaluated additional evidence. Results indicate that likability does impact overall fraud likelihood judgments. I also find that likability, experience, and accountability interact impacting the overall fraud likelihood judgment. Examination of individual evidence provides support that client likability and experience interact with certain fraud categories. That is, for individual assessments client likability impacts only certain fraud categories and only for less experienced auditors. Together, the results provide support that while client likability impacts overall judgment and individual assessments, likability's impact is moderated by experience and accountability.