5 | CONCLUSIONS
Auditing is often a stressful occupation with unique features that can exacerbate work pressure (Fisher, 2001). For example, demands to complete tasks within specified time periods during the busy season can have adverse consequences on auditing professionals’ judgment. Further, auditors must interact with client management throughout the audit process, and this interaction can cause job stress (Fisher, 2001; Nelson & Tan, 2005). This stress is the result of the requirement for the auditor to remain independent and skeptical while simultaneously developing and maintaining a good relationship with the client (Nelson, 2009).
Prior accounting research has recognized the importance of the impact of emotions on accounting professionals’ decision‐making processes. Recent accounting studies highlight the importance of EI on accountants’ job performance related to decision‐making, teamwork, and client relations (Cook, Bay, Myburgh, & Njoroge, 2011; Daff et al., 2012).
This study used an experiment to investigate the effect of EI on Chinese auditors’ judgments under different types of pressure. It extended the extant literature by simultaneously incorporating different types of pressure and examining the effect of EI on auditors’ judgments. The results suggest that EI is critically important in understanding the impact of pressure on auditors’ judgments. Different behavior patterns were found between auditors with high EI and low EI. As expected, high EI auditors exhibited more conservative judgments than did low EI auditors across treatments. Low EI auditors were more likely to investigate the questionable accounts receivable transaction further and assess a higher level of misstatement risk when they experienced high client pressure and low time budget pressure. However, when low EI auditors experienced high pressure (of either type), they failed to respond to variations in a second type of pressure. Thus, there was no significant difference in the observed likelihood of investigating further or assessments of risk between low EI auditors who experienced one pressure type and low EI auditors who experienced both pressure types. However, high EI auditors’ judgments increased in conservatism as pressures increased. High EI auditors were most likely to investigate the questionable transaction further and assess the highest misstatement risk when both pressures were present. These results suggest that, in general, high EI auditors are likely to be able to respond to multiple pressures more appropriately than are low EI auditors are.
