Internal auditors who combine likable personality traits with well-presented arguments do better at influencing managers accounting judgments and financial reporting estimates than auditors who are rude and provide information in a jumbled way, according to a new study.
The study, by Professors Kirsten Fanning of the Villanova School of Business and David Piercey of the University of Massachusetts, recently won the Outstanding Emerging Scholars Award at the American Accounting Associations Accounting Behavior & Organizations Research Conference.
Contrary to the assumption that internal auditors only need to use numbers and relevant accounting information to support their position, the study shows that how they present themselves and their accounting information is just as important.
Fanning and Piercey recruited 133 managers and other business professionals who were enrolled in a professional executive training program at the University of Massachusetts as participants in the study and had them all read case information as managers of a hypothetical firm trying to make a determination about inventory obsolescence. The experiment divided participants into groups that read different versions of the case. In one group, the internal auditor was portrayed as likable (easy to be around, down to earth, nice, and understanding), and in another, the internal auditor was dislikable (hard to be around, arrogant, a jerk, and condescending).
They read about an interaction that they had with a particular auditor, said Fanning. They were given a narrative of words that the auditor was saying to them in the meeting so they could infer whether that auditor was likable or dislikable based on the conversation that they had in the case. The controller also mentioned whether the auditor was meant to be likable and easy to get along with and that you should have no problem dealing with him. If the auditor was meant to be dislikable, it would say just the opposite, that sometimes he can be tough to deal with, but basically I just need you to get in touch with him to get some more information.
Different versions of the case also varied whether the available information was more or less supportive of the internal auditor's preferred position, and whether that information appeared in an argument format or a list format. The argument format information was arranged into logically organized paragraphs that could help recipients better understand and process the implications of that information. The list format placed exactly the same sentences of information into a randomized bullet point list to remove the arguments thematic flow.
All of the information was the same, but in the argument format, the auditor presented the information in paragraph form with items of information that were related to each other and organized by paragraph based on whether those pieces of information fit together, said Fanning. In the list condition, I randomized the sentences of information, so instead of grouping them together based on the theme or the topic they were covering, it was just the exact same sentences but in a random order to disrupt the thematic flow of that information or the cohesive argument of the information about why he believed the inventory was obsolete.
Fanning and Piercey found that managers were more persuaded by the internal auditor when the auditor used an argument format and good interpersonal skills. Neither argument format nor good interpersonal skills alone had any effect. Both had to be present to further persuade managers over and above the implications of the accounting information alone.
The joint effect of interpersonal skills and information format persuasion occurred regardless of whether the underlying accounting information was more supportive or less supportive of the internal auditor's position.
Essentially, the findings suggest that an internal auditor with even relatively less supportive accounting information could still persuade managers further by joint use of an argument format and good interpersonal skills. For example, when internal auditors had less supportive information to make their case, managers generally disagreed with internal auditors who used only argument format or good interpersonal skills. But managers agreed with internal auditors when they used both, despite the relatively unsupportive information.
Right now probably most people would believe that an internal auditor presenting good accounting information would be equally persuasive independent of his presentation, independent of whether he is likable or dislikable, or whether the format of the information is presented in a structure like an argument format or presented raw like a list format, said Fanning. I think the study shows that how internal auditors present themselves and their accounting information is an important consideration for how well they can influence managers.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access