Auditor Independence in Appearance: An Examination of Perception Differences between Accountants and Non-Accountants

29 Pages Posted: 16 Jan 2011

See all articles by Hossein Nouri

Hossein Nouri

The College of New Jersey

Sunita Ahlawat

affiliation not provided to SSRN

Date Written: January 14, 2011

Abstract

Using non-accounting business students as a proxy for general public and senior accounting students as a proxy for accounting professionals, this study investigates the effect of ten different independent scenarios dealing with auditors’ appearance of independence on the chance that the auditor will not report a material misstatement in the financial statements. The results show that there are significant difference between accounting and non-accounting respondents when the auditor has a material direct financial interest in the client, when the auditor’s family members have a material direct financial interest in the client, when the auditor’s next of kin has a key position in the client, or when the auditor receives a more favorable loan term from a car dealer through the client arrangement. We did not find any differences between male and female respondents with respect to their perceptions of the ten scenarios in this study.

Keywords: Appearence of Independence, Accountants vs non-accountants

JEL Classification: M41

Suggested Citation

Nouri, Hossein and Ahlawat, Sunita, Auditor Independence in Appearance: An Examination of Perception Differences between Accountants and Non-Accountants (January 14, 2011). CAAA Annual Conference 2011, Available at SSRN: https://ssrn.com/abstract=1740645 or http://dx.doi.org/10.2139/ssrn.1740645

Hossein Nouri (Contact Author)

The College of New Jersey ( email )

P.O. Box 7718
Ewing, NJ 08628-0718
United States

Sunita Ahlawat

affiliation not provided to SSRN ( email )

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