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Can Auditors Be Independent? - Experimental Evidence


  • Koch, Christopher

    (Sonderforschungsbereich 504)

  • Weber, Martin

    () (Lehrstuhl für ABWL, Finanzwirtschaft, insb. Bankbetriebslehre)

  • Wüstemann, Jens

    () (Lehrstuhl für ABWL und Wirtschaftsprüfung/Sonderforschungsbereich 504)


The Sarbanes-Oxley Act of 2002 has transformed the institutional environment in the US by making the audit committee responsible for the appointment, compensation and oversight of the auditor. We examine whether this institutional change successfully resolves the alleged problem of an unconscious favoring of the management (Bazerman et al. 1997, 2002, 2006) by changing the effects of auditors’ economic incentives and psychological pressure. In our experimental design, we make use of the particular features of the German institutional setting as it enables us to manipulate the client of the auditor in a realistic and clear-cut way. 72 German auditors with at least two years of job experience participated in our experiment. Following Turner (2001), we distinguish in our analyses between belief tasks (e.g. evidence evaluation) and action tasks (e.g. audit opinion). Our findings imply that certain institutional features seem to be helpful in ensuring auditor independence. First, we find that auditors demonstrate professional scepticism in belief tasks. This seems to counteract any potentially negative effect of the acceptability heuristic in actions tasks. Second, experience helped auditors in coping with psychological pressure. Third, making the auditor accountable to a supervisory board was helpful in reducing the risk that financial considerations would impair auditor independence.

Suggested Citation

  • Koch, Christopher & Weber, Martin & Wüstemann, Jens, 2007. "Can Auditors Be Independent? - Experimental Evidence," Sonderforschungsbereich 504 Publications 07-59, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  • Handle: RePEc:xrs:sfbmaa:07-59
    Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged. We thank the two big audit firms that provided participants for our

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    References listed on IDEAS

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    2. Florian Hoos & Jorien Louise Pruijssers & Michel W. Lander, 2019. "Who’s Watching? Accountability in Different Audit Regimes and the Effects on Auditors’ Professional Skepticism," Journal of Business Ethics, Springer, vol. 156(2), pages 563-575, May.

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    More about this item

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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