Date of Award
1-1-2022
Document Type
Dissertation
Degree Name
Ph.D. in Accountancy
Department
Accountancy
First Advisor
Kendall Bowlin
Second Advisor
Jeremy Griffin
Third Advisor
Robert Magee
Relational Format
dissertation/thesis
Abstract
This study examines media influence on auditor relationships with client shareholders. Audit firms are concerned about client loss due to reputational damage. Sensationalized media reports of corporate accounting frauds can be misleading in their description of the auditor’s responsibility for fraud detection. Although audit firms do not control media sensationalism, they can respond to it. I conduct an experiment to examine the impact of media sensationalism and audit firm responses on shareholders’ likelihood to support auditor ratification. I predict and find that high media sensationalism leads shareholders to perceive a higher level of audit firm control over adverse fraud outcomes. In turn, this high perception of audit firm control decreases the shareholders’ support for auditor ratification. I also find that firms who shift the blame to clients are more effective at securing ratification than those who apologize or do not respond. The results are informative to audit firm client retention strategies and research on auditor-shareholder relationships.
Recommended Citation
FLINT, LATOYA, "Auditors Are Known by the Companies that Keep Them: The Effect of Media Sensationalism and Audit Firm Responses on Auditor Ratification" (2022). Electronic Theses and Dissertations. 2215.
https://egrove.olemiss.edu/etd/2215