Resisting Management Influence: Auditor Characteristics that Inhibit Motivated Reasoning

We examine the nature of motivated reasoning and the characteristics of auditors who successfully inhibit it. We find that most auditors initially inhibit motivated reasoning, identifying an unreasonable management preference, but many do not persistently inhibit motivated reasoning, judging that same preference’s recording as acceptable, suggesting most auditors are initially uninfluenced by management’s preferences—as auditors insist—but ultimately influenced—as skeptics allege. Auditors with higher cognitive ability more persistently inhibit motivated reasoning, but only when deploying targeted cognitive effort to do so. Generally, higher emotional stability and extroversion (agreeableness) levels also positively (negatively) correlate with persistently inhibiting motivated reasoning, as does dispositional fear of negative evaluation. Neither auditors’ conscientiousness nor indecisiveness affect motivated reasoning inhibition and, counterintuitively, professional identification negatively correlates with it. Given audit practitioners’ and regulators’ stated concern for management’s influence over auditors’ judgments, our study offers insights about the auditors better able to guard against it.