Date of Award

Winter 2013

Document Type


Degree Name

Doctor of Business Administration (DBA)


School of Accountancy

First Advisor

William Stammerjohan


The purpose of this dissertation is to test for the existence of procedural injustice (PIJ) in the audit environment and its effect on junior auditor's reporting of time and level of skeptical action. This dissertation theorizes that the conflicting forces between junior auditors' ethical beliefs, formal firm policies forbidding the underreporting of chargeable time (URT), and implicit encouragement from managers to engage in URT result in a unique aspect of the audit environment, PIJ, because entry-level auditors perceive these conflicting beliefs and messages as unfair. In this study, PIJ is defined as the inverse of procedural justice, which is the fairness of procedures (Leventhal 1980).

For this dissertation, a computerized experiment is utilized where student participants, as proxies for lower-level auditors, read manipulation emails, complete an audit task, and report their time. The computer tracked their actual time to calculate the amount of underreported time by each participant. Auditor skeptical action is measured by the accuracy of the participants completing the task.

The findings of this study do not support the theorized creation of an environment of PIJ in the auditing firm. Rather the results support and extend prior research regarding the effects of time pressure. McDaniel (1990) demonstrated that as time pressure increased, audit effectiveness decreased. Similarly, this study provides evidence that for participants playing the role of auditors, as implicit pressure to URT increases, skeptical actions decrease. Given the lack of results from the initial hypotheses, an extended analysis is conducted. The extended analyses indicate that implicit pressure to URT alone or in combination with formal policies forbidding URT reduces the time spent completing audit tasks by accounting students posing as auditors. It also appears that the level of skeptical action is tied to the actual amount of time spent on the task. Finally, the results of the extended analysis suggest that the longer participants spend completing a task and the less efficient they are, the more likely they are to underreport their time.

The results appear to indicate that time pressure reduces both time spent on the task and the level of skeptical action, but not at the same rate. Given that the level of skeptical action falls less than time spent, efficiency increases. Also consistent with McDaniel (1990), the results suggest that the implicit pressure to URT produces an increase in auditor efficiency which is fully mediated by the increase in time spent. The question remains as to how much auditing firms can sacrifice in terms of skeptical action in the pursuit of increased efficiency and profit?