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    Effects of Supervisor Power on Preparers’ Responses to A...
    research summary posted May 7, 2012 by The Auditing Section, last edited May 25, 2012, tagged 09.0 Auditor Judgment, 09.11 Auditor judgment in the workpaper review process, 11.0 Audit Quality and Quality Control, 11.06 Working Paper Review – Conduct, Biases and Predispositions 
    Effects of Supervisor Power on Preparers’ Responses to Audit Review: A Field Study
    Practical Implications:

    The results of this study are important for firms to consider as they show that preparer’s perceptions of reviewers impact the preparer’s response to review notes. Audit firms should try to help their supervisors understand what they can do to exude more referent or expert power and less coercive power. Further, firms should allow subordinates to provide feedback to supervisors in order for them to understand how they are being perceived so they can take the necessary steps to alter the perception. 


    Fedor, D. B. and Ramsay, R. J. 2007. Effects of Supervisor Power on Preparers' Responses to Audit Review: A Field Study. Behavioral Research in Accounting 19 (1): 91-105.

    audit review, feedback, power, experience
    Purpose of the Study:

    The audit review process has three primary purposes, controlling the quality of work, ensuring the appropriate conclusions are reached, and allowing for formal structured interaction between team members. Providing corrective feedback to employees is a very important part of the review process and allows for employees to be informed on how their performance stands in relation to productivity and quality standards. The purpose of this study is to understand how recipients respond to the corrective feedback.  The auditor being reviewed is expected to respond differently based on their perception of the source of a reviewer’s influence (i.e. social power).  Reviewers can possess three different types of social power:

    • Referent: reviewer’s influence is based on personal acceptance or approval
    • Expert:  reviewer’s influence is based on their knowledge or expertise
    • Coercive: reviewer’s influence is based on the ability to punish or reward the reviewee

    Preparers can respond in three ways:

    • Performance improvement: improve knowledge or increase motivation
    • Feedback seeking: follow up on review points they do not understand
    • Impression management: responding in ways intended to improve the reviewer’s impression of them rather than the actual quality of work           

    The authors motivate their expectations based on the characteristics of the three dimensions of power. Referent power is positively related to organizational outcomes, people like spending time with referent people; they are easily approachable, and perceived as important. Therefore, referent power should have a positive relationship with all three responses. Expert power is also positively associated with organizational outcomes; experts are seen as possessing valuable and useful information, and others want to stay in their “good graces”. Therefore, Expert power should have a positive relationship with all three responses. Coercive power is negatively related to organizational outcomes and results in avoidance in order to stay out of harm’s way. Therefore, Coercive power is predicted to have negative relationships with all responses.

    Design/Method/ Approach:

    Data was collected prior to 2006 from subordinate auditors in the big six accounting firms. Respondents had 4 to 108 months of audit experience (average of 22 months). A ten page survey was filled out based on a specific recent performance review selected by each participant. Participants responded to a number of questions using a scale from 1 to 7.

    • Referent power has a positive relationship with performance improvement, feedback seeking, and impression management
    • Expert power has a positive relationship with feedback seeking
    • Coercive power has a negative relationship with performance improvement and feedback seeking
    • When a reviewer is seen as coercive, the negative relationship between coercive power ad performance improvement is much stronger when the reviewer is not regarded as an expert than when the reviewer is regarded as an expert.
    Auditor Judgment, Audit Quality & Quality Control
    Auditor judgment in the workpaper review process, Working Paper Review – Conduct - Biases & Predispositions
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