Psychology and neuroscience studies document that facial trustworthiness perceptions may affect observers' decision-making process. Our study examines whether auditors' perceptions of client executives' facial trustworthiness are associated with their audit fee decisions. We employ a machine-learning-based face-detection algorithm to measure executives' facial trustworthiness. We find that auditors charge 5.6% less audit fee to firms with trustworthy-looking CFOs than to those with untrustworthy-looking CFOs in initial audit engagements. Auditor tenure weakens the negative association between CFOs' facial trustworthiness and audit fee. Further evidence shows that CFO's facial trustworthiness is associated with neither financial reporting quality nor litigation risk.

This study examines whether and how entrepreneurs' facial trustworthiness is associated with the success of their crowdfunding campaigns. We adopt a novel dataset extracted from the Kickstarter crowdfunding platform and employ machine learning-based facial detection techniques to construct a comprehensive index that measures facial trustworthiness for our investigation. Our results suggest that entrepreneurs' facial trustworthiness is positively associated with crowdfunding campaign success. Specifically, trustworthy-looking entrepreneurs receive a 13.1% greater pledge amount and attract 4.8% more backers in their crowdfunding campaign as compared to those who are untrustworthy-looking. We also find that the facial trustworthiness of female entrepreneurs plays a more prominent role in determining project success than that of male entrepreneurs. Our results are robust to a series of additional analyses and sensitivity checks. Overall, the results of our study suggest that entrepreneurs' facial trustworthiness is an important factor that affects funders' decision-making process in reward-based crowdfunding.