When do Auditors' Professional Values Constrain the Biasing Effects of Self Interest? An Experimental Investigation

Abstract

ABSTRACT The purpose of this study is to identify situations in which auditors' professional values are most likely to constrain the biasing effects of self-interest. I examine whether auditors' psychological distance from a situation and the degree of ambiguity inherent in a setting influence the likelihood that auditors' values exert a stronger influence on their judgments than self-interested concerns. I predict and find that in situations characterized by ambiguity, values only exert a stronger influence when auditors evaluate a situation from a psychologically distant perspective (when they are not directly involved). When auditors evaluate the same situation from a psychologically close perspective (when they are more directly involved), self-interest exerts a stronger influence. Therefore, auditors are more likely to process information in a self-serving manner the closer they are to a situation. Absent ambiguity, values exert a stronger influence, regardless of psychological distance. Public policy, practice, and research implications are discussed.