Judgment

In response to the release of one of its Public Company Accounting Oversight Board
(PCAOB or Board) inspection reports, Deloitte notes that “[p]rofessional judgments of
reasonable and highly competent people may differ as to the nature and extent of
necessary auditing procedures, conclusions reached and required documentation”
(PCAOB, 2008, 30). Other responses to PCAOB findings echo this sentiment.
Stakeholders need to understand causes of differences between experts’ professional
judgments to effectively utilize PCAOB inspection findings and firms’ responses to those
findings. This study uses Social Identity Theory to explore whether role identity as an
audit partner, internal reviewer, or PCAOB inspector, influences an expert’s judgments in
an ambiguous decision environment. I find that professional judgments do not differ
based on professional identity. This study also examines whether the presence or absence
of outcome knowledge explains judgment differences among auditing experts. Consistent
with prior research, e.g. Peecher & Piercey, 2008, outcome knowledge does affect experts’ professional judgment. I also find that experts’ level of organizational identification and membership esteem impacts professional judgment.

Argument is made for the use of variation permissive methods in the study of social judgment; one such dynamic method which purports to track on-line social evaluation (the mouse paradigm) is then introduced. The methodology of the mouse paradigm, which involves updating 'moment-to-moment' feelings via manipulation of a cursor by computer mouse, permits a wide range of experimental contrivance. Three varieties (SCALE, 1D and 2D), which differ in the amount of virtual (on screen) freedom of movement and psychological constraint, were tested with stereotyped targets (negative, ambivalent and positive) to determine any differences in their absolute distance time series and the extent to which aspects of these time series remained correlated with traditional scale-ratings of positivity and stability in feelings about targets. Results indicated a sharp difference between the two-dimensional (2D) variety and the one-dimensional varieties (SCALE and 1D), a finding which supports contention that the 2D variety possesses an appropriate balance of freedom and constraint.

White Americans today hold complex, conflicting attitudes towards Black Americans. This research tracked participants' thoughts over time as they evaluated members of different ethnic groups performing action that was either congruent or conflicting with the stereotypes associated with the ethnic group. White and Black participants recorded their moment-to-moment feelings towards White and Black targets (represented by a photograph on the screen), and then used a computer mouse to express the feelings portrayed in their recordings. Results indicated that when Black participants evaluated a Black target committing a negative act, they expressed negative feelings, accompanied by highly dynamic changes in thought. In contrast to the results of preliminary research, White participants' judgment displayed a simple behavior effect. Results suggest that in-group/out-group judgment might reflect different dynamic properties depending on the particular ethnic groups. Future research should explore the intrinsic dynamics associated with stereotypical judgement from specific socio-historic perspectives.