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.
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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