Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 2023 erstellt
Beschreibung:
We examine differences in political ideology between audit partners and Chief Financial Officers (CFOs) and the impact of these differences on financial reporting quality. These individuals cooperate to jointly produce the audited financial statements, and yet there is limited archival literature examining their relationship. We use political campaign donation information to measure the political ideology of both audit partners and CFOs, which represents the cognitive frame through which they evaluate and approach situations. Rooted in upper echelons theory, we expect that their cognitive frame can influence their decision-making and interactions with each other during audit negotiations. We find that political-ideological differences between the audit partner and CFO are associated with higher financial reporting quality, particularly when there is high job demand (i.e., more complex tasks). These findings suggest that there are benefits that arise when individuals with different ideologies, and therefore differences in processing information, work together