The Impact of Audit Evidence Documentation on Jurors’ Negligence Verdicts and Damage Awards

2012 ◽  
Author(s):  
Ann G. Backof
Keyword(s):  
Damage Awards ◽  
Audit Evidence ◽  
The Impact

The Impact of Audit Evidence Documentation on Jurors' Negligence Verdicts and Damage Awards

2015 ◽  
Vol 90 (6) ◽  
pp. 2177-2204 ◽  
Author(s):  
Ann G. Backof
Keyword(s):  
Decision Making ◽  
Damage Awards ◽  
Audit Evidence ◽  
Auditing Standards ◽  
Audit Approach ◽  
The Impact ◽  
Professional Judgments

ABSTRACT Audit workpapers play a key role in auditor negligence trials, yet little is known about how workpaper documentation affects jurors' decision making. I investigate how auditors' documentation of their consideration of the alternative accounting treatments and their risk-based audit approach influence jurors' negligence verdicts and damage awards. I find that documentation of their consideration of the accounting alternatives increases the likelihood that auditors are found negligent because it increases jurors' perceptions of the foreseeability of the misstatement. However, when combined with documentation that explicitly links the audit risks to the work performed to address each risk, jurors award lower damage awards because they perceive auditors' actions prior to the negligent act as more compliant with the auditing standards. My results highlight the consequences of more complete documentation on jurors' evaluations of auditors and suggest the need for documentation policies that more effectively communicate the appropriateness of auditors' professional judgments.

Pre-Trial Settlement and the Value of Audits

1999 ◽  
Vol 74 (4) ◽  
pp. 473-491 ◽  
Author(s):  
Ping Zhang ◽  
Lynda Thoman
Keyword(s):  
Social Welfare ◽  
Strict Liability ◽  
The Other ◽  
Damage Awards ◽  
Liability Rules ◽  
Damage Award ◽  
Legal Costs ◽  
Net Benefits ◽  
Liability Standards ◽  
The Impact

This paper studies the impact of liability rules and damage awards on audit effort and the value of an audit (the net benefits to society of an audit) when an auditor and an investor may settle before proceeding to trial. It is demonstrated that audit effort increases with size of the damage award, but may decrease with the rigor of the auditing standards. For a given level of damage award, allowing pre-trial settlements may reduce the value of the audit despite the reduction in the deadweight legal costs. On the other hand, if the damage award is optimally chosen, then allowing settlements increases social welfare. With an appropriately set damage award, strict liability standards result in the first-best outcome, while the first-best result cannot be obtained with vague negligence rules.

scholarly journals Assessing the Damage: Money Awards by the OHRT in Sexual Harassment Cases

2019 ◽  
Vol 9 (2) ◽  
Author(s):  
Honor M. Lay
Keyword(s):  
Human Rights ◽  
Sexual Assault ◽  
Sexual Harassment ◽  
Social Services ◽  
Objective Analysis ◽  
Damage Awards ◽  
Subjective Analysis ◽  
The Impact ◽  
Medical Privacy ◽  
Ontario Human Rights Code

Individuals who experience sexual harassment in employment, housing, education, or other social services in Ontario may be entitled to a general damages remedy under section 45.2 of the Ontario Human Rights Code. The Ontario Human Rights Tribunal conducts an objective analysis of the severity of the harasser’s conduct and a subjective analysis of the impact of the incident on the applicant. Generally, the more severe the conduct or impact on the applicant, the higher the award for general damages. Due to an expectation that individuals will appear traumatized after enduring sexual harassment, an applicant’s failure to produce evidence of distress or traumatization will often adversely affect his or her entitlement to higher damage awards. This paper argues that the requirement to produce medical proof is an unwarranted invasion of the individual’s right to medical privacy, unjustly imposes an additional evidentiary burden upon the applicant, and perpetuates the myth surrounding sexual assault that trauma is visible and uniform.

The Impact of Principles-Based versus Rules-Based Accounting Standards on Auditors' Motivations and Evidence Demands

2014 ◽  
Vol 26 (2) ◽  
pp. 51-72 ◽  
Author(s):  
Marietta Peytcheva ◽  
Arnold M. Wright ◽  
Barbara Majoor
Keyword(s):  
Program Planning ◽  
Accounting Standards ◽  
Financial Statements ◽  
Accounting Standard ◽  
Planning Decisions ◽  
Joint Product ◽  
Epistemic Motivation ◽  
Audit Evidence ◽  
Cognitive Motivations ◽  
The Impact

ABSTRACT: Auditing research has investigated the effects of different accounting standards on auditors' decisions to constrain aggressive reporting by clients. Missing from this literature is evidence on how the type of accounting standard influences auditors' cognitive motivations and demand for audit evidence. This study addresses this gap in the literature, which is important since the financial statements are the joint product of management's and the auditor's actions. An experiment was conducted with U.S. and Dutch auditors to examine the manner in which principles-based versus rules-based accounting standards influence auditors' process accountability, epistemic motivation, and demands for audit evidence. The study proposes and supports a theoretical model in which principles-based accounting standards increase auditors' process accountability—the expectation of having to justify to others the decision process used, regardless of the outcome of the decision (Markman and Tetlock 2000; Libby, Salterio, and Webb 2004). Greater process accountability in turn increases auditors' epistemic motivation—the desire to develop and maintain a rich and accurate understanding of the problem at hand (Kruglanski 1989). The heightened epistemic motivation induced by principles-based accounting standards then ultimately increases auditors' demands for audit evidence. Thus, the results suggest the important influence of accounting standards on auditors' motivations and consequent program planning decisions.

The Persuasiveness of Client Preferences: An Investigation of the Impact of Preference Timing and Client Credibility

2003 ◽  
Vol 22 (1) ◽  
pp. 143-154 ◽  
Author(s):  
J. Gregory Jenkins ◽  
Christine M. Haynes
Keyword(s):  
Experimental Study ◽  
Evaluation Process ◽  
The Other ◽  
Accounts Receivable ◽  
Evidence Evaluation ◽  
Contingent Liability ◽  
Audit Evidence ◽  
The Impact ◽  
Preference Condition

Explicitly stated client preferences are intended to persuade the auditor to accept a preferred outcome. This experimental study investigates two determinants of a preference's persuasiveness—timing and client credibility. Sixty-four experienced auditors completed two hypothetical cases, one involving disclosure of a contingent liability and the other involving the collectibility of a customer account. The findings suggest that audit judgments regarding contingent liability disclosure may be biased toward a client's preference if the preference is received prior to evidence evaluation (i.e., an early preference) but not if the preference is received at the end of the evidence evaluation process (i.e., a late preference). No such bias, however, is present for the collectibility judgment. Results also indicate that auditors who receive an early preference ask to examine more additional audit evidence than those who receive a late preference, although whether they seek additional evidence to confirm or disconfirm the client's preference remains unclear. Finally, no support is found for the ordinal interaction hypothesizing that only a highly credible client in the early preference condition will differentially influence contingent liability disclosure and accounts receivable collectibility judgments.

Formation of Lunar Craters and Bright Rays as a Result of Meteorite Impacts

1962 ◽  
Vol 14 ◽  
pp. 415-418
Author(s):  
K. P. Stanyukovich ◽  
V. A. Bronshten
Keyword(s):  
Explosive Charge ◽  
The Moon ◽  
Meteorite Impacts ◽  
The Earth ◽  
Lunar Craters ◽  
The Impact

The phenomena accompanying the impact of large meteorites on the surface of the Moon or of the Earth can be examined on the basis of the theory of explosive phenomena if we assume that, instead of an exploding meteorite moving inside the rock, we have an explosive charge (equivalent in energy), situated at a certain distance under the surface.

The Geosciences Applied to Lunar Exploration

1962 ◽  
Vol 14 ◽  
pp. 169-257 ◽  
Author(s):  
J. Green
Keyword(s):  
Lunar Surface ◽  
Probable Mechanism ◽  
Point Of View ◽  
Lunar Exploration ◽  
Geological Model ◽  
Apply Geophysics ◽  
Surface Features ◽  
The Impact

The term geo-sciences has been used here to include the disciplines geology, geophysics and geochemistry. However, in order to apply geophysics and geochemistry effectively one must begin with a geological model. Therefore, the science of geology should be used as the basis for lunar exploration. From an astronomical point of view, a lunar terrain heavily impacted with meteors appears the more reasonable; although from a geological standpoint, volcanism seems the more probable mechanism. A surface liberally marked with volcanic features has been advocated by such geologists as Bülow, Dana, Suess, von Wolff, Shaler, Spurr, and Kuno. In this paper, both the impact and volcanic hypotheses are considered in the application of the geo-sciences to manned lunar exploration. However, more emphasis is placed on the volcanic, or more correctly the defluidization, hypothesis to account for lunar surface features.

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