Effects of the concept release on the auditor's reporting model on jury verdicts of auditor's legal liability

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dc.contributor Houston, Richard W.
dc.contributor Jindapon, Paan
dc.contributor Melnykov, Volodymyr
dc.contributor Parsons, Linda M.
dc.contributor.advisor Hatfield, Richard C.
dc.contributor.author Brasel, Kelsey
dc.date.accessioned 2017-03-01T16:52:44Z
dc.date.available 2017-03-01T16:52:44Z
dc.date.issued 2013
dc.identifier.other u0015_0000001_0001407
dc.identifier.other Brasel_alatus_0004D_11765
dc.identifier.uri https://ir.ua.edu/handle/123456789/1872
dc.description Electronic Thesis or Dissertation
dc.description.abstract This study examines the potential effects of the PCAOB's Concept Release 2011-003 to the standard auditor's report on an auditor's negligence liability. Specifically, I examine the effect of a required emphasis paragraph on the likelihood of guilty verdicts and damage awards in auditor negligence trials. Using a case study, participants determine the legal liability outcomes of a case against an auditor when an emphasis paragraph is absent compared to when the paragraph discusses significant accounts and estimates, as dictated by the Concept Release. This study utilizes hindsight bias and attribution theory, which relate to an individual's ability to reconstruct causal series of events ex-post, thereby affecting assumed foreseeability and responsibility. I predict the auditor's likelihood of guilty verdicts and damage awards will be higher when the emphasis paragraph is present (as required by the Concept Release) compared to when an emphasis paragraph is not provided. I also examine the likelihood of guilty verdicts and damage awards when an emphasis paragraph is present but differs in content. Consistent with hypothesized results, I find evidence that the presence of an emphasis paragraph in the auditor's report affects guilty verdicts. Specifically, the presence of an emphasis paragraph, regardless of content, increases guilty verdicts by jurors compared to when the emphasis paragraph is not present. However, contrary to hypothesized results I do not find evidence that the content of the emphasis paragraph in the auditor's report affects the magnitude of compensatory damage awards. Therefore, results suggest jurors have higher instances of guilty verdicts in an auditor negligence trial when the auditor's report contained an emphasis paragraph, regardless of if the emphasis paragraph did or did not discuss the account that eventually resulted in the audit failure. Results of this study have practical implications and contribute to both audit and legal liability literature. The topic of this study, the effects of a required emphasis paragraph in the standard auditor's report on an auditor's legal liability, remains important as the PCAOB considers requiring future changes to the auditor's reporting model.
dc.format.extent 139 p.
dc.format.medium electronic
dc.format.mimetype application/pdf
dc.language English
dc.language.iso en_US
dc.publisher University of Alabama Libraries
dc.relation.ispartof The University of Alabama Electronic Theses and Dissertations
dc.relation.ispartof The University of Alabama Libraries Digital Collections
dc.relation.hasversion born digital
dc.rights All rights reserved by the author unless otherwise indicated.
dc.subject.other Accounting
dc.title Effects of the concept release on the auditor's reporting model on jury verdicts of auditor's legal liability
dc.type thesis
dc.type text
etdms.degree.department Culverhouse School of Accountancy
etdms.degree.discipline Accounting
etdms.degree.grantor The University of Alabama
etdms.degree.level doctoral
etdms.degree.name Ph.D.


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