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    Managing Perceptions of Technical Competence: How Well Do...
    research summary posted May 4, 2012 by The Auditing Section, last edited May 25, 2012, tagged 10.0 Engagement Management, 10.03 Interaction among Team Members, 11.0 Audit Quality and Quality Control, 11.01 Supervision and Review – Effectiveness 
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    Title:
    Managing Perceptions of Technical Competence: How Well Do Auditors Know How Others View Them?
    Practical Implications:

    The results of this study provide evidence as to how accurate auditors are at knowing how their colleagues’ perceive their technical competence, or metaperceptions.  Auditors care about how their colleagues, especially their superiors, perceive them, and they have incentives to manage their reputations.  In order for auditors to manage their reputations effectively, they need to have accurate metaperceptions of the impressions they create on others, especially their superiors.  The results of this study suggest that auditors are generally highly accurate at knowing how their colleagues, especially their subordinates, perceive their technical competence. 

    Citation:

    Tan, H. and K. Jamal. 2006. Managing Perceptions of Technical Competence: How Well Do Auditors Know How Others View Them? Contemporary Accounting Research 23 (3): 761-787.

    Keywords:
    Audit workpaper review; Metaperception; Reputation management
    Purpose of the Study:

    The authors examine factors that influence an auditor’s accuracy in knowing how others on the audit engagement team view their own technical competence (termed metaperception).  Auditors strategically try to manage their superiors’ impressions of them.  Auditors care about how their colleagues view them and have incentives to manage their reputations.  Thus, the authors contend that it is important to understand the accuracy of auditors’ metaperceptions.  

    The authors assess factors that influence the accuracy of an auditor’s metaperceptions. Factors include the rank of the auditor whose performance is being assessed, the rank of the auditor performing the assessment, and the complexity of the audit task being performed.   For example, the authors examine how well an audit senior knows how their audit manager and audit partner perceives their technical competence.  An auditor’s metaperception has a direct impact on their success in managing their reputation, which is important in their career for reasons such as performance evaluations and promotions.

    Design/Method/ Approach:

    The research evidence was collected in the mid-2000s time period.  The authors gathered natural audit teams from three Big 4 firms.  On average, the teams consisted of two partners, two managers, and two seniors who previously worked together on audit engagements.  All auditors on the team performed two audit-related tasks – one of lower complexity and one of higher complexity.  Then each auditor assessed each of the other team members’ performances on the tasks by indicating whether or not they thought the other team members’ answers were accurate.  Finally, each auditor predicted how the other team members would assess the auditor’s own performance on the tasks.  High metaperception accuracy was observed when an auditor accurately predicted their colleague’s assessment of their own performance on the task.

    Findings:
    • Auditors’ metaperceptions are generally quite high, particularly for predictor auditors who are managers and partners.  For example, partners were quite accurate at predicting how their managers and senior associates assessed their performance on the tasks.  Likewise, managers were quite accurate at predicting how their senior associates assessed their performance on the tasks. 
    • For higher-complexity tasks, auditors’ metaperceptions are more accurate for higher-rank auditors than for lower-rank auditors regardless of the target auditor.  To clarify, partners are more accurate in forming metaperceptions, whether they are estimating a perception of a senior or another partner. 
    • For lower-complex tasks, higher-rank auditors have more accurate metaperceptions, but only when estimating the perceptions of a partner
    • Overall, superiors generally have accurate metaperceptions of target subordinates.
    • Managers have fairly high metaperception accuracy of target partners across both low and high-complexity tasks.
    • Seniors have high metaperception accuracy of target partners and managers only on low-complexity tasks.
    Category:
    Engagement Management, Audit Quality & Quality Control
    Sub-category:
    Interaction among Team Members, Supervision & Review – Effectiveness
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