Degree Granting Department
Patrick R. Wheeler
Audit Effectiveness, Audit Planning, Audit Quality, IT, Social Identity, Social Ties
Does social similarity between the auditor and a specialist induce social biases that impair the auditor's reliance on the specialist? It is important to examine potential impairments to reliance since auditors do not possess expertise in many of the areas examined during the audit. One type of specialist that is increasingly relied upon by the auditor is the IT specialist.
Since firms have two approaches to the organization of IT personnel (decentralized vs. centralized) and often use professional designations as a hiring criteria for specialists, I examine two dimensions of social similarity: domain knowledge distinctiveness and spatial distance. Using a 2 × 2 experiment manipulating the IT specialist's domain knowledge distinctiveness (distinct vs. overlapping) and spatial distance (in-house office location vs. outsourcing from another office) relative to the auditor, I investigate financial auditors' reliance on IT specialists.
My findings provide evidence of a boundary condition to the widely accepted social identity theory. Specifically, when specialists (IT specialists in this study) are outsourced, marginally less reliance is placed on specialists possessing overlapping (shared) domain knowledge relative to distinct domain knowledge. Additionally, I find evidence of a "consultant effect" in which greater auditor reliance is placed on IT specialists from other offices when the IT specialist possesses distinct domain knowledge relative to the financial auditor. Findings suggest that a broader theory of social similarity in which dimensions of social similarity can interact to produce social biases appears to be more descriptive of real-world social complexities than social identity theory.
Scholar Commons Citation
Limor, Rina Maxine, "Do Social Biases Impede Auditor Reliance on Specialists? Toward a Theory of Social Similarity" (2014). Graduate Theses and Dissertations.