The Beauty of Auditor Selection: The Effects of Auditor Attractiveness and Auditee Goals on Procuring Governmental Audit Services

ABSTRACT Baugh, Hallman, and Kachelmeier (2022) archivally find audit committees with no Big 4-experienced members are more likely to favor attractive partners, suggesting attractiveness influences auditor selection. We extend Baugh et al. (2022) by investigating the conditions in which attractiveness influences auditor selection. Using 140 finance directors as participants, we experimentally examine if auditor attractiveness affects hiring recommendations, and whether auditee goals moderate the effects of attractiveness. We find when the auditee’s goal is “meticulous,” recommendations are similar across conditions. However, when the goal is “check-the-box,” participants are more (less) likely to recommend more (less) attractive auditors. In the “check-the-box” condition we also find attractive auditors are more likely to be recommended compared to the baseline (no photo), indicating a “beauty premium.” Our study has implications for audit firms, auditees, and regulators by identifying a factor that contributes to auditees’ susceptibility to beauty bias, which can ultimately affect audit quality.