Auditors’ Susceptibility to Affective Bias During Repeated Client Email Exchanges with Mixed Evidence

ABSTRACT Email is a prevalent communication medium between auditors and clients for obtaining evidence and performing inquiry. Client email responses can contain affective statements that increase likability. These responses may contain mixed evidence, meaning some client responses align with audit evidence obtained and others do not. We investigate how auditors are influenced by positive affect in a mixed evidence multiple email exchange setting. In Experiment 1, results indicate that auditors judge clients as more reliable and assess a lower risk of material misstatement when emails contain positive affective cues. Interestingly, positive affect is most influential when clients provide evidence-inconsistent responses. In Experiment 2, positive affective statements do not influence auditors when the client’s first response is inconsistent. This suggests that affect primarily influences auditor judgment if a positive “first impression” is established. These results establish a boundary condition of positive affect and show when client positive affective cues are more influential. Data Availability: Please contact Kate B. Sorensen.