The Role of Case Merits in Audit Litigation: Interview Evidence

Prior research is unclear on the role of case merits in resolution of legal audit disputes. Using the Elaboration Likelihood Model (ELM) as a lens, we examine their role based on interviews of 42 audit litigation attorneys and trial consultants. Our results indicate that the role of case merits systematically differs between the two sides of audit litigation. Auditors’ (plaintiffs’) litigators believe they can achieve favorable outcomes by increasing the role of merit-relevant (merit-irrelevant) information in juror resolutions using trial venues, jurors, arguments, and argument delivery tactics. Litigators emphasize that this difference arises from the unique features of audit litigation. Our results validate a framework we developed based on ELM. The framework outlines how litigators believe they could increase the likelihood that jurors will use merit-relevant (merit-irrelevant) information in case resolutions. We discuss implications and suggest multiple venues for future research.