In two related studies, this dissertation examines experimentally the effect of situational pressures in auditing on opportunistic behavior by individual auditors. It is argued that specific conditions present in audit practice increase perceived personal reputation costs and provide auditors with incentives to take actions that may jeopardize the effectiveness of the acquisition and the evaluation of audit evidence.

Study 1 examines whether responsibility for previous work and time pressure give rise to reputation concerns and lead auditors to suppress evidence that disconfirms decisions made on the basis of earlier audit work. In a between-subjects experiment, auditors assess the extent of reputation concerns associated with encountering disconfirming evidence late in the audit, and the likelihood that such evidence will be suppressed.

Results indicate that responsibility for earlier audit work and the presence of time pressure induce reputation concerns when auditors encounter disconfirming evidence late in the audit. Responsibility for previous work and time pressure increase the likelihood for suppression of audit evidence. Results hold for the full sample even after controlling for differences among firm offices.

Study 2 examines whether knowledge of the views of audit partners leads auditors to misrepresent their judgment and report conclusions that are aligned with partners' views. While previous research has shown that the views of audit partners influence auditor judgment, it has not conclusively determined whether the influence is caused by psychological biases or by strategic economic behavior.

In two between-subjects experiments, auditors and auditing students make judgments under conditions of accountability. Both auditors and students act in a strategic manner to conform to the views of audit partners: participants who have made an audit judgment, and subsequently learn of the conflicting views of audit partners, change their reported judgment so that it conforms to partners' views.

Participants who learn partners' views before they make their own judgment are also influenced by partners' conclusions; moreover, the magnitude of this influence is not significantly different from the magnitude of misrepresentation observed if participants learn partners' views after they have made their own judgment. No significant differences are observed between the judgments of auditors and students.