Interactions of Intolerance of Ambiguity and of Contingent Liability on Auditors' Avoidance of Litigation

Dados Bibliográficos

ID13656709
AutoresAbdul Majid (0000-0002-5858-6601, School of Accountancy, The Chinese University of Hong Kong, Shatin, New Territories, Hong Kong, autor correspondente), John Pragasam (University of Southern Queensland)
Ano1997
Volume81
Fascículo3
Páginas935-944
Data de publicação1997-12-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoPsychological Reports (JOURNAL)
Identificadores do periódicoISSN: 0033-2941 • E-ISSN: 1558-691X
EditoraSAGE Publishing (PUBLISHER • US)
DOI10.2466/pr0.1997.81.3.935
OpenAlexW2071913438
IdiomaEN
Citações recebidas4
Referências citadas11

90 practicing auditors were given identical sets of financial statements except for the amount of contingent liability which was varied independently over three amounts of $50,000, $500,000, and $1 million Based on this information, they were to indicate on a 7-point rating scale anchored by 1 (little likelihood) to 7 (great likelihood), their likelihood of issuing an unqualified, i.e., clean, report. 65 useable responses were received. In accordance with the theory of tolerance for ambiguity, it was hypothesized that auditors who were rated on the MacDonald AT-20 scale as being intolerant of ambiguity would have less preference for an unqualified audit report at higher amounts of contingent liability than auditors who were rated as being tolerant of ambiguity. A between-subjects analysis of variance showed that the auditors' tolerance for ambiguity interacted with different amounts of contingent liability to affect the likelihood of their issuing an unqualified report. Implications in terms of auditors' avoidance of litigation by the client are also discussed

Actuarial science · Ambiguity · Ambiguity aversion · Ambiguity tolerance · Audit · Business · Economics · Liability · Microeconomics · Preference · Variance (accounting · Accounting · Auditing, Earnings Management, Governance · Decision-Making and Behavioral Economics · Psychology · Psychology of Social Influence · Social Psychology