This paper develops and tests a process model examining the sequential mediating roles of emotional exhaustion and surface acting on the relationships between employee perceptions of unfair treatment from customers and three forms of employee performance: in-role performance, customer-oriented organizational citizenship behavior (OCBC), and customer-oriented counterproductive work behavior (CWBC). In Study 1, we found support for our model demonstrating that the relationships between customer injustice and supervisor ratings of employees’ in-role performance and OCBC are each sequentially mediated first by emotional exhaustion and then by surface acting. In Study 2, using time-lagged data, we found additional support for our sequential mediation process when predicting CWBC. Moreover, we found that emotional demands–abilities fit moderated the sequential indirect effect of customer injustice on CWBC. Implications for research and practice are discussed.

Recent evidence suggests that auditors access social media platforms habitually throughout the workday. While exploratory research has found concerning effects related to social media usage, existing research has not investigated how viewing social media content might affect auditors. Using an experiment that holds social media usage constant, we examine how social media content impacts auditors' task performance. Relying on social comparison theory, we predict and find that the collection and evaluation of audit evidence (an integral component of audit quality) suffers when auditors view posts of peers' rewarding social experiences compared to those who do not view such content. In a further test of our theory we demonstrate that evidence collection is preserved when auditors view posts made by other accountants in a professional setting alongside posts featuring peers' rewarding social experiences. Given the audit quality consequences of our results, these findings have implications for practitioners, academics, and regulators.

Auditing standards require external auditors to inquire of client employees regarding their knowledge of actual or suspected fraud (e.g., PCAOB 2010b; AICPA 2016). However, the extant literature provides little guidance on practical methods that auditors can employ to increase the likelihood of fraud disclosure and improve audit quality. Drawing upon best practices in the whistleblowing hotline literature and psychological theories on self-regulation, we experimentally test the efficacy of two practical strategies that auditors can employ during the fraud inquiry process and that are likely to overlap in practice settings: actively promoting statutory whistleblower protections and strategically timing their fraud inquiries. Our experimental results indicate that both strategies are effective in eliciting increased disclosure of fraud. Specifically, we find that auditors are more likely to elicit client-employee disclosures of known fraud by actively promoting statutory whistleblower protections and strategically timing the fraud inquiry to take place in the afternoon, when client-employee self-regulation is more likely to be depleted. These two audit inquiry strategies should be of considerable interest to audit practitioners, audit committees, and those concerned with improving audit quality.

We examine whether audit fees reflect characteristics of individual executives incremental to known determinants of fees. Using a novel executive effects approach, we find that unexplained audit fees exhibit a statistically and economically significant association with executive effects after controlling for factors related to the firm and environment. Specifically, executive effects represent between 20 and 39 percent of the total variation in unexplained audit fees. Our tests also show only limited evidence that observable proxies are associated with the auditor's perception of an executive's style, which suggests that our analysis identifies unobservable traits that cannot be captured by typical measures in archival research (e.g., gender, age, educational background, and board membership). Collectively, our study highlights the importance of executive characteristics in the determination of audit fees and suggests that future research may benefit from additional consideration of individual executives' influence on the pricing of audit services.

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