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Do Effects of Client Preference on Accounting Professionals’ Information Search and Subsequent Judgments Persist with High Practice Risk?
Kathryn Kadous, Emory University
Anne Magro, George Mason University
Brian Spilker, Brigham Young University
ABSTRACT. Accounting professionals make judgments consistent with their client’s preference, even when that preference is aggressive. Client preference affects judgments directly and indirectly, via information search. In an experiment with tax professionals as participants, we examine whether high practice risk (i.e., exposure to monetary and nonmonetary costs of making inappropriate recommendations) mitigates these effects. We find that professionals facing a client with high practice perform a more balanced search and this reduces the indirect impact of client preference on judgments. We also find that client preference has a direct, negative impact on judgments for both high and low practice risk clients. This study demonstrates that high practice risk serves as a boundary condition on confirmation bias in information search.
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