Brant E. Christensen, Brandon N. Cline,
Nathan G. Lundstrom, Adam S. Yore
Do Auditors View Off-the-Clock Misbehavior by
Company Leadership as a Signal of Tone at the Top
(2024)
, Main Idea
The authors examine whether auditors interpret executives’ personal misconduct (e.g.,
extramarital affairs, resume falsification, substance abuse, violence) as a signal of poor
“tone at the top” that is, weak ethics and integrity within the firm.
If auditors do perceive it as a signal, they test whether auditors:
• Increase audit effort (e.g., higher audit fees, more scrutiny),
• Are more likely to resign from the client.
Nathan G. Lundstrom, Adam S. Yore
Do Auditors View Off-the-Clock Misbehavior by
Company Leadership as a Signal of Tone at the Top
(2024)
, Main Idea
The authors examine whether auditors interpret executives’ personal misconduct (e.g.,
extramarital affairs, resume falsification, substance abuse, violence) as a signal of poor
“tone at the top” that is, weak ethics and integrity within the firm.
If auditors do perceive it as a signal, they test whether auditors:
• Increase audit effort (e.g., higher audit fees, more scrutiny),
• Are more likely to resign from the client.
