The Effect of Auditor Advocacy Attitudes and Client Identification on Auditor's Initial Judgment and Search Strategy of Evidence

Researchers have recently focused on the effects of non-financial factors on auditor’s objectivity. One of the important non-financial factors affecting auditors’ objectivity is their biased attitudes. The main purpose of this study was to examine the effect of auditor’s advocacy attitudes on their objectivity in initial judgment and consequent search strategies of audit. In this study, 164 independent auditors as members of the trusted audit institutions of the Stock Exchange were tested in 2018. The results of the present research at 95% confidence level indicated that auditor’s advocacy attitudes had affected their initial judgment; therefore, auditors with higher advocacy attitudes could exhibit initial judgments of client-favorable and auditors with lower advocacy attitudes could have initial judgments of client-unfavorable. Auditor identification with their client also had a positive effect on auditor’s client acquiescence. In addition, the variables of auditor's experience and professional identification could have a significantly negative effect on initial judgment (probability of non-disclosure of contingent liability), which could be considered in accordance with principle of conservatism. The results of the second model also showed that auditor’s advocacy attitudes and initial judgment had a significant and positive effect on search strategy of audit evidence; that is, auditors could search evidence that was in line with auditor’s advocacy attitudes and initial judgment of auditor. Furthermore, no significant relationship was observed between auditor identification with their client and consequent search strategies of auditors.