Quantifying Intuitions about Risk: Comparing Public Accounting Firm Partners Perceived as “Risky” and “Non-Risky”

Anne Norris; Deborah Saber; David Morrison; Daven Morrison; Greg Trompeter

doi:10.1108/S1475-1488(2011)0000014006

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Advances in Accounting Behavioral Research

ISSN: 1475-1488
Series editor(s): Donna Bobek Schmitt

Subject Area: Accounting and Finance

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Quantifying Intuitions about Risk: Comparing Public Accounting Firm Partners Perceived as “Risky” and “Non-Risky”

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Title:	Quantifying Intuitions about Risk: Comparing Public Accounting Firm Partners Perceived as “Risky” and “Non-Risky”
Author(s):	Anne Norris, Deborah Saber, David Morrison, Daven Morrison, Greg Trompeter
Volume:	14 Editor(s): Vicky Arnold, Donna Bobek, B. Douglas Clinton, Anne Lillis, Robin Roberts, Chris Wolfe, Sally Wright ISBN: 978-1-78052-086-5 eISBN: 978-1-78052-087-2
Citation:	Anne Norris, Deborah Saber, David Morrison, Daven Morrison, Greg Trompeter (2011), Quantifying Intuitions about Risk: Comparing Public Accounting Firm Partners Perceived as “Risky” and “Non-Risky”, in Vicky Arnold, Donna Bobek, B. Douglas Clinton, Anne Lillis, Robin Roberts, Chris Wolfe, Sally Wright (ed.) Advances in Accounting Behavioral Research (Advances in Accounting Behavioral Research, Volume 14), Emerald Group Publishing Limited, pp.67-89
DOI:	10.1108/S1475-1488(2011)0000014006 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	The purpose of this study is to identify a psychological profile for public accounting firm partners who are likely to place the partnership and client shareholder at risk. Proprietary data from an executive counseling firm provided a unique opportunity to compare two groups of partners: those identified by their senior partners as placing the firm at risk (n=31) and those not so identified (n=64). The groups were compared using psychological measures, lifestyle measures, personal measures, and work history variables. Results found no significant measurable difference between the audit partners who were identified as posing a risk and those not so identified. This suggests that specific factors cannot lead a partner to engage in risky behaviors, but rather several, in combination, may be necessary. Implications for research include learning more about concepts such as resistance to temptation, motivation, and rationalization. Implications for practice are to focus on structuring business practices to provide early warning signs and minimize opportunities to engage in risky behavior. Continued and increased diligence in the client screening and client continuation and review process remain essential for best practices.