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This paper examines how the treatment of audit staff who discover errors in audit files by superiors affects their willingness to report these errors. The way staff are treated by superiors is labelled as the audit office error management climate. In a “blame-oriented” climate errors are not tolerated and those committing errors are punished. In contrast, an “open” climate characterizes error commitment as a normal, albeit unfortunate aspect of organizational life that offers opportunities for learning without sanctions on the originator. We examine error management climate in the context of audit-specific factors that might affect the decision to report errors: audit error type (conceptual or mechanical) and who committed the error (the individual who discovered it or a peer). An open climate results in an increase in the reporting of mechanical (but not conceptual) errors and all peer errors versus a blame climate. Post hoc findings suggest that one obstacle to reporting conceptual errors stems from an auditor's own impression management concerns. We discuss how auditing standards and regulatory inspections may impact audit firm error management climates. Data Availability: Experimental data are available from the second author subject to data confidentiality restrictions issued by the participating firms.

In this paper we test the effectiveness of explanations as mandated by the revised ISA 700 auditor's report in reducing the audit expectation gap. German auditors and financial statement users participated in an experiment where they read a summary of a firm's financial statements and an auditor's report, the latter of which we manipulated as being the auditor's report including the explanations as mandated by ISA 700 versus a mere audit opinion‐only version. We elicited participants' perceptions about auditor versus management responsibilities and financial statement reliability. We find strong evidence for a persistent expectation gap with respect to the auditor's responsibilities. Meanwhile, auditors and users reach a reasonable belief consensus regarding management's responsibilities and financial statement reliability. Most notably, explanations of the ISA 700 auditor's report do not result in a smaller expectation gap. Our findings suggest that the audit opinion alone may signal sufficient relevant information to users.

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This paper presents a replication and extension of Chi's (1978) classic study on chess expertise. A major outcome of Chi's research was that although adult novices had a better memory span than child experts, the children showed better memory for chess positions than the adults. The major goal of this study was to explore the effects of the following task characteristics on memory performance: (1) Familiarity with the constellation of chess pieces (i.e., meaningful versus random positions) and (2) familiarity with both the geometrical structure of the board and the form and color of chess pieces. The tasks presented to the four groups of subjects (i.e., child experts and novices, adult experts and novices) included memory for meaningful and random chess positions as well as memory for the location of wooden pieces of different forms on a board geometrically structured by circles, triangles, rhombuses, etc. (control task 1). Further, a digit span memory task was given (control task 2). The major assumption was that the superiority of experts should be greatest for the meaningful chess positions, somewhat reduced but still significant for the random positions, and nonsignificant for the board control task. Only age effects were expected for the digit span task. The results conformed to this pattern, showing that each type of knowledge contributed to the experts' superior memory span for chess positions.