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 journalArticlepeer-review

7 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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