Characteristics of Relatively High-Performance Auditors 1

Auditing: A Journal of Practice & Theory
Vol. 30, No. 1

February 2011
pp. 191206
American Accounting Association

DOI: 10.2308/aud.2011.30.1.191
Characteristics of Relatively
High-Performance Auditors
Constance A. McKnight and William F. Wright
SUMMARY: In this study, we use directly reported CPA firm performance evaluations
and hypothesize that higher-performing auditors will perceive that technical knowledge
and ability, client interaction skills, and professional attitudes/behaviors are more relevant H1, will be more inclined to extend standard audit procedures H2, and will
have a more proactive, involved internal locus of control H3. Fifty-six auditors participated, including the ranks of staff auditor, senior, and manager. Consistent with our
hypothesis, higher-performing auditors emphasized the importance of the three dimensions of the work of an auditor; lower-performing auditors did not. Higher-performing
auditors were more inclined to extend standardized audit procedures. Finally, auditors
who are more proactive regarding the performance of audit judgment tasks and decisions, i.e., they have more of an internal versus external locus of control, were associated with higher levels of job performance.
Keywords: job performance; tacit knowledge; task structure; locus of control;
expertise.
Data Availability: Contact the authors.
INTRODUCTION
The quality of financial statement audits is dependent on the job performance of auditors. Our
understanding of the determinants of auditor job performance has evolved from concentration on
the quality of judgments made based on technical knowledge and ability e.g., Bonner and Lewis
1990; Libby 1995 to overall job performance, including tacit knowledge of a broad set of performance attributes e.g., Abdolmohammadi et al. 2004; Nelson and Tan 2005; Tan and Libby
1997, including the ability to objectively evaluate subordinates Messier et al. 2008; Tan and
Jamal 2001, 2006. However, relatively little is known about what distinguishes auditors whose
overall job performance is relatively superior.
Constance A. McKnight is an Assistant Professor at the University of Central Arkansas, and William F.
Wright is a Lecturer at the University of Illinois.
We appreciate helpful comments received from the Associate Editor and two anonymous reviewers, as well as Paul Beck,
Leslie Berger, Efrim Boritz, Rajib Doogar, Natalia Kotchetova, Morley Lemon, Alister Mason, Susan McCracken, Brad
Pomeroy, and Ira Solomon.
Editors note: Accepted by Hun-Tong Tan, previous Associate Editor.
Submitted: April 2008

Accepted: July 2010
Published Online: February 2011
191
192
McKnight and Wright
More awareness of the characteristics of relatively high-performance auditors would provide

several benefits. While technical accounting knowledge and problem-solving ability are essential,
an auditors behavioral skills may, at the margin, differentiate levels of job performance Tan and
Libby 1997. Such skills may include the effectiveness of client interaction in addition to an
auditors professional attitudes and behaviors, including contributions made as a member of an
audit team. If the pertinent behavioral skills can be learned, auditors would benefit from training
to enhance their performance, e.g., role playing in simulated client situations and reinforcement of
productive interaction behaviors during brainstorming sessions. Further, if a personality trait contributes to achievement of higher job performance, such as an internal versus external locus of
control Hyatt and Prawitt 2001, CPA firms could focus on such traits as one aspect of hiring
personnel.
Using directly reported CPA firm performance evaluations, our research reveals a very different profile of characteristic of auditors who achieve relatively high levels of auditor job performance. First, in addition to their technical knowledge, higher-performing auditors indicated higher
perceived importance of both client interaction skills and professional attitudes/behaviors for their
job performance cf. Abdolmohammadi et al. 2004; Tan and Libby 1997. Second, auditors who
rely less on standard audit procedures are associated with higher levels of relative job performance
Bamber et al. 1989. Third, we test for the relevance of a personality trait, an auditors locus of
control LOC, that influences how auditors react to the demands and expectations of the audit task
environment Hyatt and Prawitt 2001. Specifically, auditors who are more proactive and expect to
influence control their audit situations an internal LOC are associated with higher levels of
overall job performance compared with auditors who perceive that outcomes are determined
principally by factors other than their personal efforts, e.g., the behaviors of others an external
LOC.
This is the first study that relates both actual CPA firm-reported and self-reported job performance evaluations to multiple characteristics of auditor job performance. We extend existing
research on the attributes of the work of an auditor cf. Abdolmohammadi et al. 2004; Tan and
Libby 1997 by revealing an underlying three-factor structure of job attributes. In addition to the
relevance of the three attribute-based factors, by adding a task-oriented aspect, a willingness to
extend standardized task procedures, and a personality aspect, an inclination to be proactive and
take responsibility during an audit, our results indicate the importance of a more comprehensive
view of the job performance of auditors.
BACKGROUND AND HYPOTHESIS DEVELOPMENT
Superior Job Performance and Attributes of the Work of an Auditor (H1)
Auditors have incentives and opportunities to refine their performance of their job attributes
and improve their overall job performance. As auditors accumulate technical knowledge Libby
and Luft 1993, CPA firms provide feedback on both the interaction skills and the professional
attitudes and behaviors of an auditor. Reviewers of audit documentation also provide performanceoriented feedback Rich et al. 1997.
Auditing research to determine the salient attributes of auditor job performance continues to
evolve Abdolmohammadi et al. 2004; Tan 1999. Early research focused on cognitive Abdolmohammadi and Shanteau 1992 and work flow-oriented Jiambalvo 1979, 1982; Kida 1984
attributes. More recent work has included client interaction skills and professional attitudes/
behaviors Abdolmohammadi et al. 2004; Tan 1999; Tan and Libby 1997. Similarly, early performance attribute research in psychology emphasized cognitive aspects, e.g., use of declarative
and procedural knowledge, and motivational aspects McCloy et al. 1994, while more recent
research includes more behavioral aspects Arvey and Murphy 1998.

February 2011
Characteristics of Relatively High-Performance Auditors
193
We partitioned the attributes of the work of an auditor into three categories also see Abdolmohammadi et al. 2004; Tan 1999: 1 technical knowledge and abilities e.g., Bonner and Lewis
1990; Libby and Luft 1993; 2 client interaction skills e.g., Tan 1999; and 3 professional
attitudes/behaviors e.g., Abdolmohammadi et al. 2004 including managerial skills Tan and
Libby 1997. While technical knowledge and abilities remain essential, skills and behaviors are
increasingly important for auditor job performance. The AICPAs core competencies for individuals entering the accounting profession incorporate a personal competencies category which
includes client interaction skills and being able to work productively with others AICPA 1999, as
well as the ability to communicate effectively in both written and oral presentations. Frecka and
Nichols 2004, 183 report that graduate programs in accounting place a great deal of emphasis on
learning of the competencies of teamwork and group interaction. Recruiters on university campuses use interviews to assess personal competencies pertaining to client interaction and communication skills, and the potential to be a productive member of an audit team. For more experienced auditors, positive client interaction skills are essential during the different forms of
negotiation that occur during an audit Brown and Wright 2008; e.g., Figure 1. Productive
client interaction skills are important for tax professionals as well Bertolini et al. 2010. Therefore, we expect that client interaction skills and professional attitudes/behaviors will be perceived
to be relevant across all ranks.1 The three categories of attributes are also consistent with current
FIGURE 1
Beta Coefficients for the Self-Reported Job Performance and the Three Performance
Dimensions for Relatively High- and Low-Performance Auditors (see Table 3)
0.600
0.509
0.500
0.400
0.296
0.300
0.226
0.180
0.200
0.100
0.100
0.071
Technical Knowledge
and Ability
Client Interaction Skills Professional Attitudes

and Behaviors
HigherPerforming
LowerPerforming
Relatively high- (low-) performing auditors: standardized firm-reported evaluation > = 0 (< 0). The three performance factors are described in the Appendix. The details of the models, including the significance of the
coefficients, are presented in Table 3.
Public accounting firms indicate greater formal emphasis on personality aspects at higher ranks. For example, Formal
reviews of auditors do assign higher weights to nontechnical skills with increasing rank Tan and Libby 1997.
February 2011
194
McKnight and Wright
job performance research in psychology that includes more contextual job attributes in addition to
technical measures of task proficiency Arvey and Murphy 1998.
We use self-assessments of attribute-level performance to develop three performance dimensions for modeling of firm-reported and self-reported job performance evaluations see the
Method section. Three attributes in the technical knowledge and ability category are very
similar to attributes used by Abdolmohammadi et al. 2004 and Tan 1999, i.e., the attributes
labeled problem-solving ability, accounting knowledge and technical analysis see the Appendix. These attributes measure the core technical capability of performing auditing tasks Bonner
and Lewis 1990. We also included two attributes to address the procedural aspects of performing
an audit, i.e., maintaining a high percentage of billable hours for the firm, high billable, and
operating within an engagement budget, within budget.
Three attributes focus on aspects of client service. They include comprehension of and interest
in a clients business, client business awareness, and two client interaction aspects: understand
client concerns measures the extent to which an auditor identifies and understands client concerns, while convince client captures the perception that client problems and concerns are
understood.
The third and final category of attributes includes aspects of an auditors professional attitudes
and behaviors. Two attributes address an auditors communication effectiveness, written communication and oral communication. Both of these attributes are emphasized by Abdolmohammadi et al. 2004 and Tan 1999. We also measured an auditors self-confidence, selfconfidence, and perceived earned respect, respect. The final two attributes address managerial
aspects, i.e., the perceived ability to handle responsibility, responsibility, and to exercise effective judgment on an audit engagement, sound judgment. Tan and Libby 1997 emphasize the
importance of the managerial aspects of the work of an auditor.
Our first hypothesis is that auditors who achieve relatively high-performance evaluations will
perceive that greater technical knowledge and ability, client interaction skills, and professional
attitudes/behaviors are more highly associated with better relative job performance. Prior research
reports that auditors who manifest superior relative performance have better tacit managerial
knowledge including knowledge of how to manage ones career Tan and Libby 1997. We
extend this idea by testing whether high-performing auditors perceive more importance of a broad
set of behavioral attributes. Stated in alternative form:
H1: Technical knowledge and abilities, client interaction skills, and professional attitudes/
behaviors will be perceived to be more important determinants of overall job performance by higher-performing auditors versus lower-performing auditors.
The Impact of How Auditors Approach Their Work (H2)
The essence of the work of an auditor is the selection and processing of evidence, and
reaching conclusions Libby and Luft 1993. An auditor who approaches client situations as being
less routine, and is inclined to extend standard audit procedures, will have different evidence
available at the input and processing phases of an audit judgment Bonner 1994; Tan et al. 2002.
Examples of judgment situations where the evidence obtained by extending standard evidence
procedures could lead to superior insights are evaluating accounting estimates, business risk analysis and assessments Knechel 2007; Peecher et al. 2007, and fraud risk analysis Allen et al. 2006;
Wilks and Zimbelman 2004.
An inclination to extend evidence gathering could be especially beneficial for the quality of
semi-structured judgments Bonner 1994. Bonner 1994 describes task structure as being the
clarity of the input, processing, and output requirements for the quality of an eventual conclusion
Bonner 1994, 2008. CPA firms provide only general guidance for semi-structured audit tasks

February 2011
195
Abdolmohammadi 1999; Abdolmohammadi and Wright 1987. Therefore, auditors must apply
their strategic knowledge, i.e., knowing when and how to adapt ones knowledge or skill to
different situations Aguinis and Kraiger 2009. Kozlowski et al. 2001, 2 note that trained
knowledge and skills need to be flexible, not rote, so they can be adapted to new, more difficult,
and more complex situations Schmidt and Bjork 1992. Adaptation by auditors could include
less reliance on standard audit procedures and consideration of alternative interpretations of the
resulting evidence Bonner 2008; Wood 1986.
Being more inclined to extend standard audit procedures enables a higher level of professional
skepticism PS, which is especially relevant when the client behaves as a strategic opponent Bell
et al. 2005; Wilks and Zimbelman 2004. More risky client situations, e.g., when governance
issues or SAS 99 red flags AICPA 2002 exist, arouse state skepticism, i.e., a temporary
condition aroused by situational client variables Hurtt 2010, 149150; Nelson 2009.2 Auditors
who are more inclined to extend standard procedures are more likely to be skeptical. Auditors who
are more skeptical will search for more persuasive evidence, suspending judgment until sufficient
evidence is available for a judgment or decision Hurtt 2010. Nelson 2009 notes that high PS
revealed by skeptical behavior is an aspect of auditor job performance. Therefore, we propose that
auditors who approach client situations as being less routine and rely less on standard audit
procedures will achieve better job performance:
H2: Auditors who approach their work as being less routine and are less inclined to rely on
standard audit procedures will be associated with higher relative job performance.
An Auditors Locus of Control and Relative Job Performance (H3)
A personality trait which may affect an auditors work-related behavior is a persons LOC,
i.e., the extent to which a person chooses to be involved with, and influence control, a process
leading to an eventual outcome. The LOC trait influences how individuals conceive of themselves,
resulting in attitudes and behaviors e.g., Hiller and Hambrick 2005; Judge and Bono 2001. While
continuous measurement scales are used, individuals are usually partitioned into two categories:
internals and externals. Internals are proactive and goal-oriented, believing that they can
directly influence the outcome of a judgment or decision process; alternatively, externals are more
passive and they prefer structured situations, believing that other people or aspects of the situation
will essentially determine the outcome Boone and Hendriks 2009; Ng et al. 2006. Internals will
search for the information and alternatives that they believe will lead to a more favorable outcome
Ozer 2008. Internals will also allocate more cognitive effort to accomplish their personally
expected high level of task performance Judge and Bono 2001; they also exhibit higher job
motivation Ng et al. 2006, better academic achievement Kalechstein and Nowicki 1997, and
more leadership qualities Ng et al. 2006. Alternatively, externals assume a more contextual less
personal determination of processes and outcomes. Instead of their personal actions, externals
assume that outcomes are more attributable to the decisions and behaviors of their superiors or
peers, or the occurrence of chance; instead of being in control, they are being controlled
Boone and Hendriks 2009.
While the LOC personality trait has been used to explain behaviors in several work domains
e.g., Judge and Bono 2001; Ng et al. 2006; Spector 1988, there has been very limited investigation of the impact of an auditors LOC on auditor job performance. We focus on whether an
auditors LOC is associated with levels of actual firm-reported performance versus effects of audit
firm structure Hyatt and Prawitt 2001 or the willingness of auditors to accept sub-standard
2
Hurtt 2010 distinguishes between trait PS as a personality characteristic and state PS.
February 2011
196
McKnight and Wright
auditing work Donnelly et al. 2003. Auditors having more of an internal LOC would be expected
to be more proactively involved and exercise more initiative; externals prefer to implement procedures and judgments selected by others, i.e., they prefer a more structured audit approach Hyatt
and Prawitt 2001. Both Chen and Silverthorne 2008 and Hyatt and Prawitt 2001 found an
association between more internal levels of LOC and higher levels of self-reported auditor job
performance. Chen and Silverthorne 2008 use self-reports of job performance in an Asian
culture and Hyatt and Prawitt 2001 use self-reports of supervisor-assessed job performance;
as our results indicate, self-reports of job performance differ from firm-reported evaluations. Also,
both Hyatt and Prawitt 2001 and Chen and Silverthorne 2008 use a less applicable LOC
instrument Rotter 1966 that measures LOC in several nonwork settings instead of the more
focused work-oriented instrument provided by Spector 1988 see Donnelly et al. 2003, 9596.
The association that exists using the more applicable work-oriented LOC scale and auditors
firm-reported job performance evaluations is the focus of this research. We predict that auditors
who have more of an internal versus external LOC will be associated with higher overall job
performance Donnelly et al. 2003; Hyatt and Prawitt 2001.
H3: Auditors whose personality results in more of an internal versus an external locus of
control will be associated with higher overall job performance.
METHOD
Data Availability, Participants, and Materials
A central aspect of this research is direct availability of actual CPA firm personnel evaluations. Eleven public accounting firms were contacted initially; eight firms agreed to participate. An
auditors two most recent supervisor-assessed performance evaluations and annual compensation
were reported to the researchers. To ensure anonymity, a numbering identification scheme was
used on the instruments so that we could match data received directly from the auditors see
below with the performance information provided by each human resource manager. Only the
human resource managers had knowledge of the names associated with each identifying number.
In addition to the actual performance evaluations obtained from the human resource managers, we requested judgments directly from the evaluated auditors. The auditors provided a selfassessment of their overall job performance based on the same two most recent engagements,
self-assessments of their performance on 14 job performance attributes, responses to items that
comprised reliance on standard audit procedures and the LOC construct see below, judgments of
the extent to which their firm implemented a structured auditing methodology, and other demographic information. The instrument was pilot-tested with senior managers not included in the
sample and was revised accordingly. The instruments were mailed to the human resource manager
at each of the eight participating firms, who distributed them to the participants. We requested
participation from all field auditors within the office of each of the firms. If a firm was unable to
provide participation from all employees, the human resource manager randomly solicited possible
volunteers. Each participant was given a return envelope and mailed the instrument directly to the
researchers. We relied on the human resource managers and the auditors to perform these tasks.
The response data were received and matched to the firm-reported data for 87 of 118 contacted auditors, including five auditors who responded to a second request, for a response rate of
74 percent. Given the criterion of availability of an auditors two most recent engagement performance evaluations and allowing for missing values, we have complete data for 75 auditors. Five
of the eight firms used a 15 evaluation scale, one used a 100-point scale, and two firms used a
13 scale cf. Tan and Jamal 2001. Representative verbal anchors for the 15 scales are: unsatisfactory, requires improvement, satisfactory, above average, and outstanding. For one of the two
firms that used a 13 scale, the human resource manager reported the same meets expectations

February 2011
197
evaluation for 93 percent of the auditor engagement evaluations and 7 percent as needs improvement, without any of the third exceeds expectations evaluations. This pattern of virtually
invariant job performance is very different from the more dispersed patterns reported by the other
seven human resource managers. The extremely limited variability of the personnel evaluations
reported by the firm would cause the statistical analysis to be less representative and more unstable. Therefore, we exclude the data from this firm. The result is complete data for 56 auditors:
27 staff auditors, 15 seniors, and 14 managers including four senior managers from seven firms.
The auditors were employed at five local and two international firms in Northwest Arkansas one
office was in Memphis, Tennessee. The staff, seniors, and managers indicated, respectively, mean
standard deviation years of experience of 1.75 1.16, 4.68 3.73, and 7.58 2.00; 11 percent of
the staff, 73 percent of the seniors, and all of the managers had completed their CPA requirements.
Firm-Reported and Self-Reported Relative Performance Measurements
We computed the firm-reported relative job performance measure using the average of each
auditors two most recent engagement performance evaluations. First, all of the evaluations were
scaled such that a more positive evaluation corresponded to a higher evaluation. Second, given
that different evaluation scales are used at the firms, we used a procedure employed by Hyatt and
Prawitt 2001, i.e., we standardized the evaluations on a within-firm basis, yielding a range of
from 1.47 to 2.04 standard deviations for the 56 auditors. We partitioned the auditors into those
that performed relatively well standardized firm-reported performance greater than, or equal to,
zero and those who performed relatively less well standardized firm-reported performance less
than zero, yielding, respectively, 27 and 29 auditors.
Each auditor provided an evaluation of his or her relative overall job performance on the
auditors same two most recent client engagements on a 17 scale, with 7 being the highest
relative performance. These two responses were averaged to yield a self-reported measure of
relative job performance. The average self-reported job performance evaluations do not differ
significantly for the three different ranks, F2, 53 1, or for the seven different CPA firms, F6,
49 1. We also standardized the self-reported evaluations on a within-firm basis, yielding a
range of from 2.35 to 1.74 standard deviations for the 56 auditors.
Performance Attributes and Task Perceptions
Each auditor provided a self-assessment of his or her relative performance on each of the 14
performance attributes in the three categories see the Appendix.3 We estimate the underlying
factor-analytic dimensionality of the 14 attribute assessments. We then test for associations of the
factor-analytic dimensions with both the firm-reported Table 2 and the self-reported Table 3
overall job performance evaluations. Self-assessments of the attributes were obtained because we
required performance assessments for the same set of attributes and dimensions across all ranks
and firms. Also, the firms did not have details available on all of the 14 attributes. Therefore, we
use the attribute self-assessments as proxies for the underlying performance attributes.
Each auditor was told that An auditors performance is measured by many criteria
controlling costs, maintaining client relationships, communicating effectively, etc. and then was
asked to indicate your level of success relative to other auditors at the same level at your firm.
The scale ranged from 1, being Much less successful than others, to 7, being Much more
successful than others.
We used an instrument developed by Bamber et al. 1989 to measure the extent to which the
3
We thank Professors Troy Hyatt and Doug Prawitt for permitting us to use their set of job performance attributes see
Hyatt and Prawitt 2001 for the context of their development of the attributes.
February 2011
198
McKnight and Wright
participants rely on standard audit procedures.4,5 The scale includes five measures of an auditors
perceived reliance on standard audit procedures and one measure of the extent to which an auditor
perceives his or her work to be routine.6 A five-point Likert scale was used for each of the six
items, with the anchor labels 1 to a very little extent and 5 to a very great extent. Using
the mean of the six items, a lower value indicates less reliance on use of standard audit procedures.
The prediction is a negative relationship, i.e., decreasing reliance on standard audit procedures will
be associated with increasing levels of job performance H2.
The internal reliability levels for the reliance on standard procedures instrument is 0.756 using
Cronbachs . This result compares favorably with the corresponding reported by Bamber et al.
1989, 292 of 0.72. Also, we included an eight-item scale that measured the extent to which an
auditor perceived that his or her firms audit methodology was structured Bamber et al. 1989.
The anchor labels for the eight items are 1 strongly disagree and 5 strongly agree.
Cronbachs for the firm structure scale is 0.890.
Following Donnelly et al. 2003, as is usually done in work settings Ng et al. 2006, we used
Spectors 1988 more applicable work-oriented LOC scale WLCS instead of the original Rotter
1966 scale to measure the auditors LOC. The WLCS scale comprises 16 questions pertaining to
relationships between causes and rewards/outcomes, with responses on a Likert scale having a
maximum of 6. With reverse scaling for eight of the 16 items, low scores represent more of an
internal LOC while high scores represent more of an external LOC. The WLCS scale values range
from 17 to 64, with a mean of 39.59. Using the same scale, the auditors in the Donnelly et al.
2003 study indicated a range of 2068, with a mean of 42.88. Reliability for the WLCS scale is
acceptable given a Cronbachs of 0.82 that is similar to results from previous studies Spector
1988; e.g., Donnelly et al. 2003 report a Cronbachs of 0.83. Given the expected positive
impact of a more internal LOC, we predict a negative relationship for the WLCS scale measurements and firm-reported job performance H3.
RESULTS
Underlying Dimensionality of Attributes of Auditor Job Performance
Using the full set of 75 auditors to maximize the number of observations, we employed factor
analysis to test our hypothesized perceived three dimensions of the 14 attributes see Table 1.7
The Kaiser-Meyer-Olkin measure of sampling variability is 0.878, indicating that the data are
suitable to yield distinct and reliable factors. The results of the Bartlett sphericity test reject the
null hypothesis that the 14 attributes are uncorrelated in the population, approximate Chi-square
531.10, p .001, suggesting potential for worthwhile data reduction.
Three principal components with eigenvalues greater than one were extracted and subjected to
varimax rotation, explaining a total of 64.4 percent of the variance in the 14 attributes. Consistent
with our predictions, the pattern of factor loadings indicates three primary dimensions of perceived
auditor performance see Table 1. The first factor, Technical Knowledge and Ability, explains
23.99 percent of the total variance in the attributes. The attribute loadings using greater than |.60|
as the criterion on the first factor suggest that the problem-solving ability, accounting knowledge, technical analysis, within budget, and high billable attributes comprise this dimen4
5
6
7
We thank Professor Bamber for permitting our use of the instrument.

Our use of this instrument to measure the extent to which the participants rely on standard audit procedures is consistent
with Bamber et al.s 1989, 288 view that this instrument measures the degree to which objective computational
procedures are available as compared to having to think about what to do including searching for solutions.
The instrument can also be interpreted to measure aspects of an auditors willingness to search for and fully examine
sufficient evidence before making a decision Hurtt 2010, 152154.
One staff auditor did not complete the attribute judgments. We inserted the mean attribute judgments for the staff
auditors for this individual.

February 2011
199
TABLE 1
Dimensions of Relative Auditor Job Performance
Factor Loadings for the 14 Performance Attributes (see the Appendix)
Dimensions (Factors)
Performance Attributes
Problem-Solving Ability
Accounting Knowledge
Technical Analysis
Client Business Awareness
Understand Client Concerns
Convince Client
Written Expression
Oral Expression
Respect
Self Confidence
Responsibility
Sound Judgment
Within Budget
High Billable
Technical
Knowledge and
Ability
Client
Interaction
Skills
Professional
Attitudes and
Behaviors
0.770
0.623
0.761
0.658
0.725
0.855
0.660
0.628
0.696
0.800
0.657
0.535
0.630
0.716
Extraction method: Principal Component Analysis. Rotation method: Varimax with Kaiser Normalization.
Rotation converged in seven iterations. Three eigenvalues are greater than 1.0 and they explain 64.4% of the total variance.
Factor labels: 1 Technical Knowledge and Ability; 2 Client Interaction Skills; 3 Professional Attitudes and Behaviors.
Insignificant factor loadings equal to or less than |.60| were eliminated Field 2009, 644645.
sion. The second factor, Client Interaction Skills, which explains 21.92 percent of the variance,
captures the nature and quality of client interaction. Attributes that load on this factor include the
client business awareness, understand client concerns, and convince client attributes, as well
as the written expression attribute. The written expression attribute was expected to load
more heavily on the third factor. The third factor, Professional Attitudes and Behaviors, which
explains 18.50 percent of the variance, includes the oral expression, respect, and selfconfidence attributes, as well as the managerial attribute, responsibility. We excluded the
managerial sound judgment attribute. It was predicted to load on the Professional Attitudes and
Behaviors factor, but the loading is higher on the Client Interaction Skills factor, 0.535 versus
0.414, both being below our |.60| criterion. Reinforcing the nature of this third factor, the respect attribute indicates competence achieved with auditors with whom the auditor interacts, and
the self-confidence attribute indicates a personal sense of perceived competence.
The Job Performance Model: Testing of the Three Hypotheses
The five constructs in the job performance model using the standardized firm-reported performance evaluations are: 1 the three dimensions of the work of an auditor based on the selfassessed values of the 14 attributes, 2 the extent to which the auditors rely on standard audit
procedures, and 3 an auditors disposition toward being proactive regarding audit tasks the LOC
construct. The model is significant, F5, 50 4.294, p .003 with an Adjusted R2 of 0.230
Table 2. Four of the five construct measures are significant p .074. The Client Interaction
Skills and Professional Attitudes/Behaviors work dimensions are correlated significantly with
February 2011
200
McKnight and Wright
TABLE 2
Tests of the Three Hypotheses
Unstandardized
Coefficients
B
Constant
Technical Knowledge and
Ability H1
Client Interaction Skills H1
Prof. Attitudes and Behaviors
H1
Reliance on Std. Procedures
H2
Locus of Control H3
Std. Error
Standardized
Coefficients
Beta
Sig.
3.199
0.100
0.982
0.112
0.107
3.260
0.898
0.002
0.187
0.179
0.261
0.106
0.120
0.201
0.261
1.689
2.172
0.048
0.017
0.684
0.187
0.451
3.658
0.001
0.023
0.015
0.182
1.476
0.073
The dependent variable is the standardized firm-reported relative evaluations of auditor job performance. The five variables
are implied by the three hypotheses: The model is significant.
F5,50 4.294, p 0.003; Adjusted R2 = 0.230; one-tailed tests of coefficient significance.
The three dimensions of the duties of an auditor are Technical Knowledge and Ability, Client Interaction Skills, and
Professional Attitudes and Behaviors see Table 1 and the Appendix. Reliance on standard audit procedures is measured
by using the mean of six items. The locus of control measure was obtained by using the 16-item work locus of control
WLCS scale generated by Spector 1988.
levels of firm-reported relative performance, i.e., Client Interaction Skills, t 1.689, p .048,
and Professional Attitudes and Behaviors, t 2.172, p .017. Levels of the third Technical
Knowledge and Ability dimension do not distinguish among the relative performance levels
t 0.898, p .187however, see below.
High- versus Low-Performing Auditors and the Three Performance Dimensions (H1)
H1 predicts that the higher-performing auditors will indicate higher associations of the selfassessed Technical Knowledge and Ability, Client Interaction Skills, and Professional Attitudes/
Behaviors work dimensions. For the relatively high- and relatively low-performance auditors, we
regressed the standardized self-reported performance evaluations on the three self-assessed performance dimensions see Table 3. Very different profiles are revealed. Only for the higher
performers does the Technical Knowledge and Ability dimension distinguish marginally among
levels of relative performance at the 10 percent level of significance. The higher performers also
emphasize the Client Interaction Skills p .055 and Professional Attitudes and Behaviors p
.005 performance dimensions while the low performers do not see Figure 1. The model for the
relatively high performers is significant, F3, 23 4.42, p 0.014, with an adjusted R2 of 0.283.
In contrast, the results for the relatively low performers are insignificant statistically and substantively regarding the three dimensions of performance see Table 3. The results are not significantly different across the ranks see the Discussion section. These results are consistent with
H1.
Effects of Being Inclined to Extend Standard Audit Procedures (H2)
H2 predicts that auditors who rely less on standard audit procedures will be associated with
higher levels of job performance. Consistent with this prediction, the beta coefficient of 0.451 in
the job performance model Table 2 is significant, t 3.658, p .001, and this is the largest

February 2011
201
TABLE 3
Relatively High- and Low-Performance Auditors and Associations with the Three Job
Performance Dimensions
Self-Reported Overall Job Performance Evaluations
Auditors
Standardized Standardized Standardized

Coefficient:
Coefficient:
Coefficient:
Technical
Client
Professional
Knowledge and Interaction Attitudes and
Ability
Skills
Behaviors
Adjusted R2
Model
Significance
High-Performance 27
0.226
p 0.101
0.296
p 0.055
0.509
p 0.005
0.283
F 3,23 4.42
p 0.014
Low-Performance 29
0.071
p 0.362
0.100
p 0.315
0.180
p 0.186
0.066
F 3,25 0.424
p 0.737
High- Low- performance auditors: standardized firm-reported evaluation 0 0. The three performance factors are
described in the Appendix. The magnitudes of the coefficients are compared in Figure 1.
coefficient among the five explanatory variables.8 The correlation between the auditors extent of
reliance on standard audit procedures and their assessments of firm-level structure is 0.398,
p 0.002, i.e., the auditors who were more inclined to rely on standard audit procedures assessed
their firms audit approach to be more structured cf. Hyatt and Prawitt 2001. Regarding job
performance, and consistent with H2, the correlation with reliance on standard audit procedures is
0.375, p 0.002, one-tailed, and this association remains significant after adjustment for the
auditors assessments of their firm-level structure, i.e., the partial correlation is 0.363, p .003.
The staff auditors at the large firms were less inclined to rely on standard audit procedures, i.e.,
3.125 versus 3.767 for the staff auditors at the small firms, t 3.367, p .001; no significant
differences are indicated for the seniors and managers.
Effects of Perceived Locus of Control (H3)
H3 predicts that the auditors who have more of an internal LOC a lower WLCS score will
be associated with better job performance. Consistent with H3, the locus of control measure is a
marginally significant determinant of job performance t 1.476, p 0.073 with a predicted
negative beta coefficient of 0.182 Table 2. The means of the LOC measurements are not
significantly different for the three different ranks or the large versus small CPA firms.9
Additional Analyses
Auditors Understanding of Their Relative Overall Job Performance
To what extent are auditors aware of their relative job performance? Tan and Jamal 2006
report that superiors understood the task performance of their subordinates. However, the benefit
8
Bamber et al. 1989 also measure subjective task-related uncertainty variety. The participants provided measurements of task uncertainty. The measurements are not significant p 0.222 when they are included in the job
performance model reported in Table 2.
We also measured an auditors commitment to his or her current organization. We used the commitment question
employed by Donnelly et al. 2003, which provides a four-category possible response. For example, the most committed response is I plan to remain with my current organization until I retire. No significant differences were indicated
for the firm- or self- reported overall job evaluations. A notable aside is that the high commitment auditors, i.e., those
who intended to remain for five-plus years or until retirement with their current audit firm, have significantly more
internal and better work locus of control, i.e., a mean of 37.0 versus 42.3, F1,54 6.756, p .012.
February 2011
202
McKnight and Wright
of CPA firm performance feedback may not be fully assimilated by auditors. Kennedy and Peecher
1997 found that auditors were overconfident regarding the extent of their technical knowledge.
While Kennedy and Peecher 1997 focus on one performance attribute versus multiple dimensions, auditors who are overconfident about their performance of an important attribute may
incorrectly evaluate their relative overall job performance. Overconfidence could also complicate
efforts to calibrate ones performance relative to that of ones peers and superiors Tan and Jamal
2006. Moreover, Jourden and Heath 1996 found that even when people are given veridical task
feedback, their perceived level of competence drives their motivation and productivity.10
The relatively high-performance auditors indicate significant awareness of their superior performance. We ran a 2 3 ANOVA with the self-reported performance evaluations as the dependent variable, relatively high versus low firm-reported performance as one factor, and the three
ranks as the second factor. The self-reported job performance evaluations are significantly higher
for the higher performance auditors, 0.464 versus 0.459, t 3.52, p .001, one-tailed.11 The
main effect of the ranks is not significant, F2,50 1 and the ranks factor does not interact with
the high- versus low-performance factor, F2,50 1. The relatively high-performance auditors
also have significantly higher mean attribute ratings, 71.70 versus 66.28, t 2.135, p .02,
one-tailed.12
The Value of Expertise
In addition to the performance evaluations, we obtained from the human resource managers
levels of annual auditor compensation and whether overtime compensation was paid. Only one of
the small firms paid overtime compensation. Therefore, we can measure the value in compensation of levels of firm-reported performance. Using the square root transformation of the annual
salary data to achieve a distribution consistent with the normal distribution assumption, the
regression model includes two control variables. As would be expected, levels of compensation
differ according to rank, F2, 49 53.10, p 0.001, and compensation is higher at the larger
firms, F1, 49 21.02, p 0.001. The firm-reported job performance measure is significant, t
2.647, p 0.01, one-tailed: An increase of one standard deviation in firm-reported performance
implies a $2,307 difference in annual compensation.
DISCUSSION
This study provides new insights regarding the characteristics of relatively high-performance
auditors: they manifest a very different perception of their work. Auditors are increasingly expected to develop client interaction skills in addition to professional attitudes and behaviors Abdolmohammadi et al. 2004; Tan and Libby 1997and the higher-performing auditors recognized
the relevance of these behaviors Tables 2 and 3 also see Arvey and Murphy 1998. Auditors
who rely less on standard audit procedures cf. Tan et al. 2002 and auditors who are more internal
versus external in their locus of control Chen and Silverthorne 2008; Donnelly et al. 2003; Hyatt
and Prawitt 2001 are associated with higher levels of job performance.
10
11
12
Evaluating the performance of subordinates is also a demanding task. For example, seniors may be able to use selfpromotion to manage the performance beliefs of their managers Emby and Gibbins 1988; Rich et al. 1997. More
knowledgeable superiors may overestimate the knowledge of subordinates Kennedy and Peecher 1997. Tan and Jamal
2001 report that when they evaluated the quality of justification memoranda, managers having received an average
performance evaluation were biased by awareness of the prior performance of a senior with whom they work; outstanding managers avoided this bias, thereby more objectively evaluating job performance.
A larger percentage of staff auditors are in the firm-reported relatively low-performance group, i.e., relative percentages
of 69 percent versus 26 percent. The average firm-reported evaluation is lower for the staff auditors, i.e., a mean
evaluation of 3.29 versus 3.79 for the seniors and managers, t 3.34, p .05, all on a 15 scale.
The correlation of the standardized firm-reported and self-assessed job performance evaluations is 0.501, p .001,
one-tailed. The correlations for the staff auditors, seniors, and managers are, respectively, 0.433, 0.564, and 0.764 all p
.02.

February 2011
203
A complementary explanation for the association of being inclined to extend standard audit
procedures and job performance is that higher-performance auditors may be assigned to more
demanding judgment tasks, i.e., tasks with less structure Bonner 1994, 230. This selection
process and the greater opportunity provided for superior job performance may have contributed
to the significant association. We also note that the reliance on standard audit procedures is lower
for the staff auditors at the large firms, 3.12 versus 3.77, t 3.767, p .001. The explanation may
be that staff auditors at the large firms audit clients that have more complex business operations.
The reliance on standard audit procedures for the seniors and managers at the large and small firms
is not significantly different.
Two limitations of our study should be noted. First, future research is needed to refine our
understanding of the most representative portfolio of job attributes and work dimensions for
distinguishing levels of auditor job performance see the Appendix. Significant progress has been
achieved Abdolmohammadi and Shanteau 1992; Abdolmohammadi et al. 2004; Tan 1999; Tan
and Libby 1997 but clarification and refinement remain necessary. Second, we have a relatively
small sample of auditors across the three ranks; more statistical power would have permitted
estimating of the three work dimension coefficients for rank-specific models.13 While the difficulties of obtaining actual CPA firm evaluations of performance are significant, their use is important
for understanding the characteristics of higher-performing auditorsand we indicate that selfreports of job performance are correlated with, but are not identical to, firm-reported evaluations.
APPENDIX
JOB PERFORMANCE ATTRIBUTES
The participants indicated their perceived level of success relative to other auditors at the
same level at his or her firm using a 17 scale, with 1 being Much less successful than others,
and 7 being Much more successful than others.
1. Technical Knowledge and Ability
Developing practical solutions to problems encountered on an engagement. Problem-Solving
Ability
Developing an adequate understanding of relevant firm accounting releases, SEC regulations,
federal and state income tax laws, etc. Accounting Knowledge
Possessing technical ability in preparing financial statements and reports. Technical Analysis
Operating within an engagement budget. Within Budget
Maintaining a high percentage of billable hours for the firm. High Billable
2. Client Interaction Skills
Comprehension of and interest in my clients businesses. Client Business Awareness
Listening attentively to identify and understand the real concerns of my clients. Understand
Client Concerns
Convincing clients that I understand their unique problems and concerns. Convince Client
13
For example, while the cell sizes are very small, the coefficients are in the predicted directions, i.e., for the higherlower- performing staff auditors, 0.747 0.414 for the Client Interaction dimension and 0.710 0.316 for the Professional Attitudes and Behaviors dimension. For the higherlower- performing seniors and managers, the coefficients are
0.114 0.081 for the Client Interaction dimension and 0.608 0.176 for the Professional Attitudes and Behavior
dimension.
February 2011
204
McKnight and Wright
3. Professional Attitudes and Behaviors

Effectiveness of written expression. Written Expression
Effectiveness of oral expression. Oral Expression
Gaining the respect of associates. Respect
Projecting an image of self-confidence. Self Confidence
Ability to handle responsibility. Responsibility
Exercising sound judgment on an engagement. Sound Judgment
REFERENCES
Abdolmohammadi, M. J. 1999. A comprehensive taxonomy of task structure and knowledge base demands in
auditing. Behavioral Research in Accounting 11: 5192.
, and J. Shanteau. 1992. Personal attributes of expert auditors. Organizational Behavior and Human
Decision Processes 53 November: 158172.
, D. J. Searfoss, and J. Shanteau. 2004. An investigation of the attributes of top industry audit specialists. Behavioral Research in Accounting 16: 117.
, and A. Wright. 1987. An examination of the effects of experience and task complexity on audit
judgments. The Accounting Review 62 January: 113.
Aguinis, H., and K. Kraiger. 2009. Benefits of training and development for individuals and teams, organizations, and society. Annual Review of Psychology 60: 451471.
American Institute of Certified Public Accountants AICPA. 1999. Core Competency Framework for Entry
into the Accounting Profession. New York, NY: AICPA.
American Institute of Certified Public Accountants AICPA. 2002. Consideration of Fraud in a Financial
Statement Audit. Statements on Auditing Standards No. 99. New York, NY: AICPA.
Allen, R. D., D. R. Hermanson, T. M. Kozloski, and R. J. Ramsay. 2006. Auditor risk assessment: Insights
from the academic literature. Accounting Horizons 20 2: 157177.
Arvey, R. D., and K. R. Murphy. 1998. Performance evaluation in work settings. Annual Review of Psychology 49: 141168.
Bamber, E. M., D. Snowball, and R. M. Tubbs. 1989. Audit structure and its relation to role conflict and role
ambiguity: An empirical investigation. The Accounting Review 64 April: 285299.
Bell, T. B., M. E. Peecher, and I. Solomon. 2005. The 21st Century Public Company Audit. Urbana, IL:
University of Illinois and KPMG LLP. Available at: http://www.business.illinois.edu/kpmg-uiuccases/
monograph2.pdf.
Bertolini, M., C. Borgia, and P. H. Siegel. 2010. The social skill preferences of tax professionals in CPA
firms: A FIRO-B analysis. The Journal of Applied Business Research 26 March/April: 105114.
Boone, C., and W. Hendriks. 2009. Top management team diversity and firm performance: Moderators of
functional-background and locus-of-control diversity. Management Science 55 2: 165180.
Bonner, S. 1994. A model of the effects of audit task complexity. Accounting, Organizations and Society 19
April: 213234.
2008. Judgment and Decision Making in Accounting. Upper Saddle River, N.J.: Pearson Prentice Hall.
, and B. Lewis. 1990. Determinants of auditor expertise. Journal of Accounting Research 28 Supplement: 120.
Brown, H. L., and A. Wright. 2008. Negotiation research in auditing. Accounting Horizons 22 March:
91109.
Chen, J-C., and C. Silverthorne. 2008. The impact of locus of control on job stress, job performance and job
satisfaction in Taiwan. Leadership and Organization Development Journal 29 7: 572582.
Donnelly, D. P., J. J. Quirin, and D. OBryan. 2003. Auditor acceptance of dysfunctional audit behavior: An
explanatory model using auditors personal characteristics. Behavioral Research in Accounting 15:
87110.
Emby, C., and M. Gibbins. 1988. Good judgments in public accounting: Quality and justification. Contemporary Accounting Research 42: 287313.

February 2011
205
Field, A. 2009. Discovering Statistics Using SPSS. London, U.K.: Sage.

Frecka, T. J., and W. D. Nichols. 2004. Characteristics of masters in accounting degree programs. Issues in
Accounting Education 19 2: 165188.
Hiller, N. J., and D. C. Hambrick. 2005. Conceptualizing executive hubris: The role of hyper- core selfevaluations in strategic decision-making. Strategic Management Journal 26: 297319.
Hurtt, R. K. 2010. Development of a scale to measure professional skepticism. Auditing: A Journal of
Practice & Theory 29 1: 149171.
Hyatt, T., and D. Prawitt. 2001. Does congruence between audit structure and auditors locus of control affect
job performance? The Accounting Review 76 April: 263274.
Jiambalvo, J. 1979. Performance evaluation and directed job effort: Model development and analysis in a
CPA firm setting. Journal of Accounting Research 17 2: 436455.
1982. Measures of accuracy and congruence in the performance evaluation of CPA personnel: Replication and extensions. Journal of Accounting Research 20 1: 152161.
Jourden, F. J., and C. Heath. 1996. The evaluation gap in performance perceptions: Illusory perceptions of
groups and individuals. The Journal of Applied Psychology 81 4: 369379.
Judge, T. A., and J. E. Bono. 2001. Relationship of core self-evaluations traitsself-esteem, generalized
self-efficacy, locus of control, and emotional stabilitywith job satisfaction and job performance: A
meta analysis. The Journal of Applied Psychology 86: 8092.
Kalechstein, A. D., and S. Nowicki. 1997. A meta-analytic examination of the relationship between control
expectancies and academic achievement: An 11-year follow-up to Findley and Cooper. Genetic, Social, and General Psychology Monographs 123: 2956.
Kennedy, J., and M. Peecher. 1997. Judging auditors technical knowledge. Journal of Accounting Research
35 2: 279293.
Kida, T. E. 1984. Performance evaluation and review meeting characteristics in public accounting firms.
Accounting, Organizations and Society 9 2: 137147.
Knechel, W. R. 2007. The business risk audit: Origins, obstacles and opportunities. Accounting, Organizations and Society 32 May-July: 383408.
Kozlowski, S. W. J., S. M. Gully, K. G. Brown, E. Salas, E. M. Smith, and E. R. Nason. 2001. Effects of
training goals and goal orientation traits on multidimensional training outcomes and performance
adaptability. Organizational Behavior and Human Decision Processes 85 May: 131.
Libby, R. 1995. The role of knowledge and memory in audit judgment. In Judgment and Decision-Making
Research in Accounting and Auditing, edited by Ashton, A., and R. Ashton, 176206. Cambridge,
U.K.: Cambridge University Press.
, and J. Luft. 1993. Determinants of judgment performance in accounting settings: Ability, knowledge,
motivation, and environment. Accounting, Organizations and Society 18 July: 425450.
McCloy, R. A., J. P. Campbell, and R. Cudeck. 1994. A confirmatory test of a model of performance
determinants. The Journal of Applied Psychology 79 4: 493505.
Messier, W. F., Jr., V. Owhoso, and C. Rakovski. 2008. Can audit partners predict subordinates ability to
detect errors? Journal of Accounting Research 46 December: 12411264.
Nelson, M. W. 2009. A model and literature review of professional skepticism in auditing. Auditing: A
Journal of Practice & Theory 28 2: 134.
, and H-T. Tan. 2005. Judgment and decision-making research in auditing: A task, person, and interpersonal interaction perspective. Auditing: A Journal of Practice & Theory 24 Supplement: 4171.
Ng, T. W. H., K. L. Sorensen, and L. T. Eby. 2006. Locus of control at work: A meta-analysis. Journal of
Organizational Behavior 27: 10571087.
Ozer, M. 2008. Personal and task-related moderators of leader-member exchange among software developers. The Journal of Applied Psychology 93 5: 11741182.
Peecher, M., R. Schwartz, and I. Solomon. 2007. Its all about audit quality: Perspectives on strategicsystems auditing. Accounting, Organizations and Society 32 May-July: 463485.
Rich, J. S., I. Solomon, and K. T. Trotman. 1997. The audit review process: A characterization from the
persuasion perspective. Accounting, Organizations and Society 22 July: 481505.
Rotter, J. B. 1966. Generalised expectancies for internal versus external control of reinforcement. Psychological Monographs 80 1: 169214.
February 2011
206
McKnight and Wright
Schmidt, R. A. and R. A. Bjork 1992. New conceptualizations of practice: Common principles in three
paradigms suggest new concepts for training. Psychological Science 3: 207217.
Spector, P. E. 1988. Development of the work locus of control scale. Journal of Occupational Psychology
61: 335340.
Tan, H-T. 1999. Organizational levels and perceived importance of attributes for superior audit performance.
Abacus 35 1: 7790.
, and K. Jamal. 2001. Do auditors objectively evaluate their subordinates work? The Accounting
Review 76 January: 99110.
, and . 2006. Managing perceptions of technical competence: How well do auditors know how
others view them? Contemporary Accounting Research 23 3: 761787.
, and R. Libby. 1997. Tacit managerial versus technical knowledge as determinants of audit expertise in
the field. Journal of Accounting Research 35 Spring: 97113.
, T. B. Ng, and B. W. Mak. 2002. The effect of task complexity on auditors performance: The impact
of accountability and knowledge. Auditing: A Journal of Practice & Theory 21 September: 8195.
Wilks, T. J., and M. F. Zimbelman. 2004. Using game theory and strategic reasoning concepts to prevent and
detect fraud. Accounting Horizons 18 3: 173184.
Wood, R. E. 1986. Task complexity: Definition of the construct. Organizational Behavior and Human Decision Processes 37 1: 6082.

February 2011
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

Characteristics of Relatively High-Performance Auditors 1

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Characteristics of Relatively High-Performance Auditors 1

Enviado por

Direitos autorais:

Formatos disponíveis

Auditing: A Journal of Practice & Theory

Vol. 30, No. 1

American Accounting Association

Submitted: April 2008

McKnight and Wright

More awareness of the characteristics of relatively high-performance auditors would provide

Auditing: A Journal of Practice & Theory