The Impact of Audit Committee Skepticism and Reward Power on Auditor Communications with the Audit Committee

ABSTRACT Auditing standards emphasize the importance of strong auditor communications with audit committee to enhance financial reporting quality. This study examines effects skepticism and reward power, two pervasive characteristics, on committee. Drawing accountability theory, we predict find that greater power induce communicate more information report a timely basis. Seventy-nine partners managers participated in an experiment where manipulate between-subjects high or low (quantity probing questions) (exercising full authority hire/compensate versus relying management). Participants responded realistic case regarding inventory obsolescence issue. A follow-up 30 participants indicates significant mediation for accountability. The findings underscore enhancing communications.