（2002）predecisional distortion of evidence as a consequence of real-ime audit review.pdfVIP

THE ACCOUNTING REVIEW Vol. 77, No. 1 January 2002 pp. 51–71 Predecisional Distortion of Evidence as a Consequence of Real-Time Audit Review T. Jeffrey Wilks Brigham Young University ABSTRACT: With the current shift toward real-time audit review, subordinates become aware of supervisors’ views earlier in the audit process. I use an experiment to examine whether earlier knowledge of supervisors’ views in- creases subordinates’ tendencies to agree with those views because subor- dinates predecisionally distort evidence. In a going-concern task, I find that auditors who learn the partner’s view before evaluating evidence (1) evaluate individual evidence items as more consistent with the partner’s view, and (2) make going-concern judgments that are more consistent with the partner’s view, than do auditors who learn the same partner’s view after evaluating ev- idence. In a second experiment, I examine whether auditors anticipate the distortion’s effect on subordinates’ judgments. I find that auditors expect sub- ordinates to make judgments that agree with supervisors’ views, but auditors do not expect subordinates to agree even more with those views when sub- ordinates learn those views earlier in the audit process. Keywords: predecisional distortion of information; motivated reasoning; ac- countability; real-time audit review. Data Availability: Contact the author. This paper is based on my dissertation completed at Cornell University. I express special thanks to my committee members, Mark Nelson, Jay Russo, Naomi Altman, and especially my chair, Bob Libby, for their invaluable guidance and encouragement. I also