The Effects of Client Importance and Career Concerns on Auditors’ Judgment Conservatism

Jorien Pruijssers, Marcel van Rinsum

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We examine how client importance affects judgment conservatism depending on auditors’ career concerns. We argue that auditors will interpret being assigned to a client of major importance as a more powerful signal of their promotion chances under strong competition than under weak competition for advancement and, hence, that they will consider their promotion opportunities to a greater extent in their judgments. We therefore predict that auditors exhibit more conservatism in their judgments regarding more important clients when competition for advancement is strong but not when it is weak. Using an experiment, we generally find results in line with this prediction. Unexpectedly, yet interestingly, we also find that less important clients are judged less conservatively under strong competition than under weak competition for advancement.
Original languageEnglish
Pages (from-to)67-84
Number of pages18
JournalBehavioral Research in Accounting
Volume36
Issue number1
DOIs
Publication statusPublished - 2024

Bibliographical note

Publisher Copyright:
© 2024, American Accounting Association. All rights reserved.

Research programs

  • RSM F&A

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