Auditors' Perceptions of Client Firms: The Stigma of Decline and the Stigma of Growth

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Auditors' Perceptions of Client Firms: The Stigma of Decline and the Stigma of Growth. / McKinley, William; Ponemon, Lawrence A.; Schick, Allen G.
In: Accounting, Organizations and Society, Vol. 21, No. 2-3, 01.02.1996, p. 193-213.

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McKinley W, Ponemon LA, Schick AG. Auditors' Perceptions of Client Firms: The Stigma of Decline and the Stigma of Growth. Accounting, Organizations and Society. 1996 Feb 1;21(2-3):193-213. doi: 10.1016/0361-3682(95)00026-7

Bibtex

@article{2f1741d61f3f42b4be33ee2400f9bc43,
title = "Auditors' Perceptions of Client Firms: The Stigma of Decline and the Stigma of Growth",
abstract = "This paper examines the relationship between auditors' perceptions of client organizations' growth/ decline status and the auditors' assessments of client managers' competence and integrity. It is hypothesized that perceived growth/decline status will have an inverted-U relationship with perceived management competence and integrity. If client organizations are perceived by auditors as rapidly declining or rapidly growing, the auditors' evaluations of their managers' competence and integrity will be lower than if the organizations are perceived as stable. Results from a study of auditors' perceptions of 123 actual client organizations are partially supportive of the hypotheses. We conclude that rapid organizational decline may be stigmatizing in the eyes of auditors because it raises questions about management competence. Rapid organizational growth also may be stigmatizing, but for a different reason: it creates auditor doubts about management integrity. The results of the study are discussed from the perspectives of organization studies and auditing research after which suggestions for future investigation are made.",
keywords = "Economics",
author = "William McKinley and Ponemon, {Lawrence A.} and Schick, {Allen G.}",
year = "1996",
month = feb,
day = "1",
doi = "10.1016/0361-3682(95)00026-7",
language = "English",
volume = "21",
pages = "193--213",
journal = "Accounting, Organizations and Society",
issn = "0361-3682",
publisher = "Pergamon Press",
number = "2-3",

}

RIS

TY - JOUR

T1 - Auditors' Perceptions of Client Firms

T2 - The Stigma of Decline and the Stigma of Growth

AU - McKinley, William

AU - Ponemon, Lawrence A.

AU - Schick, Allen G.

PY - 1996/2/1

Y1 - 1996/2/1

N2 - This paper examines the relationship between auditors' perceptions of client organizations' growth/ decline status and the auditors' assessments of client managers' competence and integrity. It is hypothesized that perceived growth/decline status will have an inverted-U relationship with perceived management competence and integrity. If client organizations are perceived by auditors as rapidly declining or rapidly growing, the auditors' evaluations of their managers' competence and integrity will be lower than if the organizations are perceived as stable. Results from a study of auditors' perceptions of 123 actual client organizations are partially supportive of the hypotheses. We conclude that rapid organizational decline may be stigmatizing in the eyes of auditors because it raises questions about management competence. Rapid organizational growth also may be stigmatizing, but for a different reason: it creates auditor doubts about management integrity. The results of the study are discussed from the perspectives of organization studies and auditing research after which suggestions for future investigation are made.

AB - This paper examines the relationship between auditors' perceptions of client organizations' growth/ decline status and the auditors' assessments of client managers' competence and integrity. It is hypothesized that perceived growth/decline status will have an inverted-U relationship with perceived management competence and integrity. If client organizations are perceived by auditors as rapidly declining or rapidly growing, the auditors' evaluations of their managers' competence and integrity will be lower than if the organizations are perceived as stable. Results from a study of auditors' perceptions of 123 actual client organizations are partially supportive of the hypotheses. We conclude that rapid organizational decline may be stigmatizing in the eyes of auditors because it raises questions about management competence. Rapid organizational growth also may be stigmatizing, but for a different reason: it creates auditor doubts about management integrity. The results of the study are discussed from the perspectives of organization studies and auditing research after which suggestions for future investigation are made.

KW - Economics

UR - http://www.scopus.com/inward/record.url?scp=0030077747&partnerID=8YFLogxK

U2 - 10.1016/0361-3682(95)00026-7

DO - 10.1016/0361-3682(95)00026-7

M3 - Journal articles

VL - 21

SP - 193

EP - 213

JO - Accounting, Organizations and Society

JF - Accounting, Organizations and Society

SN - 0361-3682

IS - 2-3

ER -