This paper examines the impact of two elements of the client's control environment on auditor's assessment of the risk of material misstatement: audit committee strength and CEO narcissism, the latter of which is a component of management philosophy, operating style, and tone at the top. We predict and find that auditors' risk assessments are adequately responsive to both elements; however, importantly, a strong audit committee decreases perceived risk assessments only when the client has a CEO with less narcissistic characteristics. In other words, our findings suggest that the presence of narcissistic CEOs' attitudes weakens the perceived audit committee effectiveness, leading auditors to rely less on a strong audit committee. Our findings contribute to the auditing literature by exploring auditors' responses to the complex dynamics between management boards and those charged with governance. From a practical perspective, our results suggest that auditing standards and practice guidance should consider making such complexities and the role of management attitudes and styles even more explicit.

中文翻译：

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审计委员会的力量和审计师的风险评估：CEO 自恋的调节作用

本文考察了客户控制环境的两个要素对审计师评估重大错报风险的影响：审计委员会的实力和 CEO 自恋，后者是管理理念、经营风格和高层基调的组成部分。我们预测并发现审计师的风险评估对这两个要素有充分的反应；然而，重要的是，只有当客户的 CEO 不那么自恋时，强大的审计委员会才会降低感知风险评估。换句话说，我们的研究结果表明，自恋的 CEO 态度的存在削弱了审计委员会的有效性，导致审计师对强大的审计委员会的依赖减少。我们的研究结果通过探索审计师的 对管理委员会和治理层之间复杂的动态作出反应。从实践的角度来看，我们的结果表明，审计标准和实践指南应该考虑使这种复杂性以及管理态度和风格的作用更加明确。