What Happens after Audit Review? The Effects of Individual Feedback Orientation and the Supervisor's Approach on Attitudes and Actions of Staff Auditors

Abstract

The audit review process is both a quality control mechanism and an opportunity to provide feedback to improve the performance of staff auditors. While most prior research focuses on the features of audit review that impact task performance of staff auditors, there is little attention specifically devoted to understanding auditors’ attitudes and actions following the review experience, which can drive counterproductive behaviors and turnover. Informed by theories from the psychology and management literatures, we use an experiential questionnaire to investigate how the staff auditor’s receptivity to feedback (i.e., feedback orientation) and the supervisor’s approach to the review (i.e., provision of positive/negative feedback and emphasis on learning/performance goals) combine to affect the coaching relationship at the time of review, subsequent actions to improve performance, and the current overall attitude towards the review experience. We find that individuals with stronger feedback orientations are less likely to let negative feedback adversely affect their coaching relationship and are more likely to act on it to improve performance, relative to those with weaker feedback orientations. However, results on current attitudes toward review imply that individuals with weaker feedback orientations can overcome their initial reactions to negative feedback if it is provided with learning goals. These results underscore the importance of examining personal characteristics of auditors in contexts where their behaviors may be dependent on these characteristics. Further, contrary to research in psychology, we find that learning goals are as or more effective than performance goals in producing better attitudes of staff auditors following review, whether feedback is positive or negative.