Improving auditor performance evaluations: The impact on self‐esteem, professional skepticism, and audit quality

• Published date: 01 October 2021
• Author: Leslie H. Blix,Lawrence C. Chui,Byron J. Pike,Shani N. Robinson
• Date: 01 October 2021
• DOI: http://doi.org/10.1002/jcaf.22512

Received:  June  Accepted:  July 

DOI: ./jcaf.

RESEARCH ARTICLE

Improving auditor performance evaluations: The impact on

self-esteem, professional skepticism, and audit quality

Leslie H. Blix1Lawrence C. Chui2Byron J. Pike3Shani N. Robinson1

Sam Houston State University,

Huntsville, Texas,USA

University of St. Thomas, Saint Paul,

Minnesota, USA

Minnesota State University, Mankato,

Minnesota, USA

Correspondence

LeslieH. Blix, Sam Houston State Univer-

sity,Huntsville,Texas,USA.

Email:lhb@shsu.edu

Abstract

In public accounting, the performance evaluation process involves assessing and

communicating feedback to employees. In the financial statement audit setting,

in particular, supervisors provide feedback to subordinates frequently through-

out a fiscal year. Prior research finds that performance evaluations are based

largely on the subordinate’s work outcomes, such as task completion and bud-

geted hours, and also are related to employee satisfaction/dissatisfaction and

an increase/decrease in overall job performance. Utilizing psychology theories,

we investigate whether a manager’s feedback tone (supportive/non-supportive)

and evaluation focus (tasks/goals) influence auditors’ self-esteem as well as

their corresponding professional skepticism, including their search for evidence.

Based on an experiment with  experienced auditors, we find that support-

ive and goal-focused performance evaluations, independently, lead to higher

self-esteem. This elevated self-esteem translates into desirable auditor attributes,

such as greater professional skepticism and an increase in search for evidence

and audit quality. Our results are valuable to practice, as firms attempt to train

and retain their employees through the performance evaluation process.

KEYWORDS

audit quality, performance evaluation, professional skepticism, self-esteem

1 INTRODUCTION

Financial statement auditors (hereafter referred to as audi-

tors) receive performance evaluations frequently through-

out a fiscal year. Once auditors are hired and brought on

board, the performance evaluation process at CPA firms

becomes the most direct and frequent mechanism for

training and enhancing employee behavior. These evalu-

ations provide valuable feedback that is used to help train

employees and improve audit quality.An unintended con-

sequence of such performance evaluations, however, is

that they can adversely affect employee motivation and

behavior (Andiola, ), causing a majority of audit part-

ners to have reservations about these evaluations (Wester-

mann et al., ).

Thus, the purpose of this study is to experimentally

examine the how the performance evaluation process for

auditors affects their self-esteem and, in turn, their profes-

sional skepticism, including their search for evidence, and

the overall quality of the audit. Professional skepticism is

considered a key component of audit quality within the

field of accounting research (Bowlin et al., ;Francis,

; Hurtt et al., ; Kadous, ;Kangetal.,)and

produces higher audit quality when individuals are better

equipped to make such skeptical judgment (Knechel et al.,

; Peecher et al., ). The emphasis of our investi-

gation is on the tone of the feedback (supportive/non-

supportive) and the evaluation focus (goal-focused/task-

focused). In particular, we evaluate how a supportive

versus non-supportive feedback tone influences auditors’

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