An experiment was conducted to examine the determinants and consequences of auditors' perceptions of management. Based on the theory of correspondent inference (Jones & Davis, 1965), the following hypotheses were formulated: (1) auditors are most likely to make a dispositional inference about management when a transaction deviates from expectations and is made under conditions of high choice; (2) auditors are more likely to make a dispositional inference about the management of a new client than that of a continuing client; and (3) dispositional inferences about management will affect auditors' subsequent judgments. The results support the first hypothesis. Contrary to the second hypothesis, subjects' dispositional inferences about management did not differ significantly between the continuing client and the new client conditions. Finally, the materiality threshold of auditors was found to be significantly associated with their inferences about management.
ASJC Scopus subject areas
- Sociology and Political Science
- Organizational Behavior and Human Resource Management
- Information Systems and Management