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Thus psychological forces associated with group

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Unformatted text preview: also find that the self-serving bias does not differ significantly between the yes-puffery/strong group and the no-puffery/weak group settings. Thus, psychological forces associated with group affiliation can neutralize the bias, calling into question Bazerman et al.’s (1997) conclusion that auditors cannot conduct impartial audits due close repeated interactions with their clients. In the next section I discuss the game that the subjects played. Section III discusses the experimental method, and the development of hypotheses follows in Section IV. The results are presented in Section V, and Section VI provides a discussion of the research. II. GAME There are two players: a manager and an auditor. The manager selects a fraud level, which determines the amount of resources the manager attempts to embezzle.3 For any given fraud level, the manager faces one of two outcomes. The first outcome occurs if the auditor does not detect the fraud, so the manager’s payoff is relatively high becaus...
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