To what extent areauditors'attitudes toward the evidence influenced by the self-fulfilling prophecy?

Andrés Guiral, Emiliano Ruiz, Waymond Rodgers

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

We examined whether auditors' attitudes toward the evidence in the going concern setting may be driven by their expectations of the self-fulfilling prophecy effect. Following previous research on motivated reasoning, we assumed that the self-fulfilling prophecy effect could be interpreted as a potential motivational/incentive factor supporting auditors' reluctance to issue going concern opinions. The belief-adjustment model of Hogarth and Einhorn (1992) was used to estimate auditors' attitudes toward confirming and disconfirming evidence by manipulating, in a laboratory experiment, order of evidence and framing (viability versus failure), and capturing auditors' expectations of the self-fulfilling prophecy effect. Our results indicate that auditors' expectations of the self-fulfilling prophecy affected their attitudes toward confirming and disconfirming evidence. Further, we specifically find that auditors with higher expectations of the selffulfilling prophecy had a greater sensitivity to mitigating evidence and, at the same time, a lower tendency to favor contrary evidence.

Original languageEnglish
Pages (from-to)173-190
Number of pages18
JournalAuditing
Volume30
Issue number1
DOIs
Publication statusPublished - 2011 Feb 1

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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