Interactions between auditors and client management affect audit quality on an engagement because those interactions influence and incentivize auditor behavior and decision-making. I perform an experiment using 191 management participants to investigate (1) whether an auditor’s use of professional judgment or industry norms to justify proposed adjustments increases management’s evaluation of audit quality, and (2) whether these evaluations differ under principles-based or rules-based standards. I find that, although management views industry norms to be more credible, they disregard an auditor’s justification method and evaluate audit quality based on underlying accounting attributes when reporting under a more rules-based standard, such as US GAAP. However, when an accounting standard is more principles-based, such as IFRS, using industry norms positively influences perceptions of audit quality. Thus, when standards are less precise, auditors are incentivized to engage in herding behavior by defaulting to industry norms when determining appropriate accounting treatments. This study increases our understanding of the incentives and motivations faced by auditors in their interactions with client management under both rules-based and principle-based accounting standards.

中文翻译：

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在基于原则和基于规则的会计准则下，审计师对行业规范的使用如何不同地影响管理层对审计质量的评估？

审计师和客户管理层之间的互动会影响审计质量，因为这些互动会影响和激励审计师的行为和决策。我对 191 名管理层参与者进行了一项实验，以调查 (1) 审计师使用专业判断或行业规范来证明拟议调整的合理性是否会提高管理层对审计质量的评估，以及 (2) 这些评估在基于原则或基于规则的情况下是否有所不同标准。我发现，尽管管理层认为行业规范更可信，但他们在根据更加基于规则的标准（例如美国公认会计准则）进行报告时，忽视了审计师的论证方法并根据基本会计属性评估审计质量。然而，当会计准则更加以原则为基础时，例如《国际财务报告准则》，使用行业规范会对审计质量的看法产生积极影响。因此，当标准不太精确时，审计师在确定适当的会计处理方法时，就会被激励通过默认行业规范来进行羊群行为。这项研究增加了我们对审计师在基于规则和基于原则的会计准则下与客户管理层互动时所面临的激励和动机的理解。