Seeing is believing? Executives' facial trustworthiness, auditor tenure, and audit fees

Tien Shih Hsieh, Jeong Bon Kim, Ray R Wang, Zhihong Wang*

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    51 Citations (Scopus)


    Psychology and neuroscience studies document that facial trustworthiness perceptions may affect observers' decision-making process. Our study examines whether auditors' perceptions of client executives' facial trustworthiness are associated with their audit fee decisions. We employ a machine-learning-based face-detection algorithm to measure executives' facial trustworthiness. We find that auditors charge 5.6% less audit fee to firms with trustworthy-looking CFOs than to those with untrustworthy-looking CFOs in initial audit engagements. Auditor tenure weakens the negative association between CFOs' facial trustworthiness and audit fee. Further evidence shows that CFO's facial trustworthiness is associated with neither financial reporting quality nor litigation risk.

    Original languageEnglish
    Article number101260
    JournalJournal of Accounting and Economics
    Issue number1
    Publication statusPublished - Feb 2020

    Scopus Subject Areas

    • Accounting
    • Finance
    • Economics and Econometrics

    User-Defined Keywords

    • Audit fee
    • Auditor tenure
    • CFO
    • Cognitive bias
    • Facial trustworthiness


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