Prior research indicates that individuals acting as jurors experience outcome effects in audit negligence litigation. That is, jurors evaluate auditors more harshly in light of negative outcomes, even when audit quality is constant. I posit that outcome effects in this setting are caused by jurors using their negative affect (i.e., feelings) resulting from learning about negative audit outcomes as information relevant to auditor blameworthiness. I tested this hypothesis in an experiment in which I manipulated audit quality, outcome information, and provision of an attribution instruction. The attribution instruction was designed to discredit negative affect as a cue to auditor blameworthiness. Consistent with expectations, attribution participants' evaluations of auditors exhibited less reliance on outcome information and more reliance on audit quality information than did evaluations made by control participants. In fact, outcome effects were eliminated for attribution participants. Courts may be able to improve the quality of jurors' decisions in such cases by employing an attribution instruction.

Prior research indicates that individuals acting as jurors experience outcome effects in audit negligence litigation. That is, jurors evaluate auditors more harshly in light of negative outcomes, even when audit quality is constant. I posit that outcome effects in this setting are caused by jurors using their negative affect (i.e., feelings) resulting from learning about negative audit outcomes as information relevant to auditor blameworthiness. I tested this hypothesis in an experiment in which I manipulated audit quality, outcome information, and provision of an attribution instruction. The attribution instruction was designed to discredit negative affect as a cue to auditor blameworthiness. Consistent with expectations, attribution participants' evaluations of auditors exhibited less reliance on outcome information and more reliance on audit quality information than did evaluations made by control participants. In fact, outcome effects were eliminated for attribution participants. Courts may be able to improve the quality of jurors' decisions in such cases by employing an attribution instruction.

This essay is based on my American Accounting Association (AAA) Presidential Scholar Lecture delivered at the 2025 AAA Annual Meeting in Chicago. In this essay, I assert that theory-based scientific research is the best way to solve the practical—and existential—problems that threaten the accounting profession. I provide an example based on my own research into auditors’ judgments about complex estimates. I further argue that, although academic researchers and accounting practitioners share goals regarding the success and legitimacy of the accounting profession, their roles and responsibilities differ. I encourage accounting researchers to address the big problems facing the profession through independent development of generalizable knowledge, and I ask practitioners to support the research endeavor.

This study investigates whether providing higher quality audits increases auditors' chances of avoiding legal liability. Negligence rules hold auditors responsible for plaintiff losses only when the quality of the audit provided fails to meet standards of care. The results of my experiment suggest that the ex post observed consequences of audit failure can affect the standards of care to which jurors hold auditors. Specifically, participants serving in the role of jurors assessed higher standards of care for auditors when the consequences of audit failure were more severe. Furthermore, when the consequences of audit failure were more severe, participants' evaluations of the auditor did not depend on the quality of the audit provided—auditors who provided higher quality audits were evaluated just as negatively as those who provided lower quality audits. In contrast, when audit failure led to only moderately negative consequences, auditors who provided higher quality audits received more favorable evaluations. These results suggest that providing higher quality audits will not necessarily protect auditors from legal liability when the consequences of audit failure are severe.

Avoiding continued investment in poorly performing projects is an important function of management control systems. However, prior research suggests that managers fail to use accounting information indicating that a project is performing poorly to discontinue it; that is, they escalate commitment to the project. We perform two experiments to investigate the efficacy of a potential control mechanism, third‐party consultation, in preventing managerial escalation of commitment. We hypothesize that the information‐processing objective (that is, purpose) assigned to consultants influences the mental representations they construct to process and store information, which ultimately influences their recommendations regarding the continuation of a poorly performing project. Results suggest that consultants will not construct mental representations amenable to making high‐quality project‐continuation recommendations unless they are assigned that specific purpose. Results further suggest that applying additional effort likely will not overcome the adverse effects of having inappropriate mental representations when making project‐continuation recommendations. An implication of our study is that third‐party consultants likely will not prevent managerial escalation of commitment unless consultants have a specific mandate of making a project‐continuation recommendation in mind when they encounter relevant accounting information.

Intrinsic motivation is generally thought to be positively associated with performance on a variety of tasks. However, there is only sparse experimental evidence supporting this idea and we know little about the specific mechanisms behind any effect. We develop theory about how auditors’ intrinsic motivation for their jobs can improve their judgments about complex accounting estimates. We experimentally test whether a prompt to make auditors’ intrinsic motivation for their jobs salient improves the specific information processing behaviors necessary for high‐quality judgments in complex audit tasks. It does: Prompted auditors attend to a broader set of information, process information more deeply, and request more relevant additional evidence. Supplemental analyses show that these processing behaviors mediate between salient intrinsic motivation and an improved ability to identify a biased complex estimate. Our theory and analyses indicate that auditors’ intrinsic motivation for their work provides unique value for improving judgment quality, particularly in the context of performing complex audit tasks. Our study supports the view that high‐quality cognitive processing can improve auditors’ professional skepticism by providing a foundation for skeptical judgments.

Tax professionals are responsible for objectively evaluating tax authorities and evidence relevant to their application and for serving as client advocates. We predict that practice risk — that is, exposure to monetary and nonmonetary costs of making inappropriate recommendations — will affect tax professionals' ability to meet these responsibilities by influencing the manner in which they process information about a tax situation as well as their resulting recommendations for clients. We conduct an experiment in which we manipulate practice risk through client characteristics. We also manipulate provision and nature of outcome information. We find that tax professionals process information differently for clients of different risk levels. Specifically, tax professionals weight negative outcome information more heavily when forming likelihood assessments underlying recommendations for a high-risk client, relative to a low-risk client. Further, risk directly affects recommendations in that tax professionals more strongly recommend an aggressive position for a low-risk client. Differential processing of information for clients with identical transactions but different risk levels may protect the tax professional from the higher expected costs of making inappropriate recommendations to high-risk clients. However, it indicates that tax professionals do not evaluate evidence objectively for all types of clients.

Tax professionals are responsible for objectively evaluating tax authorities and evidence relevant to their application and for serving as client advocates. We predict that practice risk — that is, exposure to monetary and nonmonetary costs of making inappropriate recommendations — will affect tax professionals' ability to meet these responsibilities by influencing the manner in which they process information about a tax situation as well as their resulting recommendations for clients. We conduct an experiment in which we manipulate practice risk through client characteristics. We also manipulate provision and nature of outcome information. We find that tax professionals process information differently for clients of different risk levels. Specifically, tax professionals weight negative outcome information more heavily when forming likelihood assessments underlying recommendations for a high‐risk client, relative to a low‐risk client. Further, risk directly affects recommendations in that tax professionals more strongly recommend an aggressive position for a low‐risk client. Differential processing of information for clients with identical transactions but different risk levels may protect the tax professional from the higher expected costs of making inappropriate recommendations to high‐risk clients. However, it indicates that tax professionals do not evaluate evidence objectively for all types of clients.

We conduct an experiment with 749 mock jurors to examine whether juries evaluate auditors differently under precise versus imprecise standards when the client reporting is held constant. We find that the impact of standard precision on jury verdicts depends on the aggressiveness of the audit client's financial reports and on the industry reporting norm. When the client's reporting is more aggressive and violates the precise standard, juries return fewer verdicts against auditors under the imprecise standard, especially when the reporting complies with the industry norm. When the client's reporting is less aggressive and complies with the precise standard, juries return more verdicts against auditors under the imprecise standard, but only when the client's reporting is more aggressive than the industry norm. Compliance with industry reporting norms appears to provide auditors with safe harbor protection from negligence verdicts when accounting standards are imprecise.