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The Impact Of Disclosing Auditor Independence And Tenure On Non-Professional Investor Judgment And Decision-Making, L. Tyler Williams
The Impact Of Disclosing Auditor Independence And Tenure On Non-Professional Investor Judgment And Decision-Making, L. Tyler Williams
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This study experimentally investigates how disclosing both the auditor’s obligation to remain independent of its client and auditor tenure in the audit report influence non-professional investors’ judgments and decision-making, especially the decision about whether to invest in a particular auditee. In the Auditor’s Reporting Model (ARM) proposal, the Public Company Accounting Oversight Board (PCAOB) asserts that inclusion of additional information in the audit report will improve the informativeness of the audit report for investors and as a result will modify its relevance to investment decisions. Using an experiment, I find that these disclosures positively influence non-professional investor judgments of auditor …