Seeing is believing? Executives' facial trustworthiness, auditor tenure, and audit fees

Tien Shih HSIEH, Jeong Bon KIM, Ray R. WANG, Zhihong WANG*

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)peer-review

54 Citations (Scopus)


Psychology and neuroscience studies document that facial trustworthiness perceptions may affect observers' decision-making process. Our study examines whether auditors' perceptions of client executives' facial trustworthiness are associated with their audit fee decisions. We employ a machine-learning-based face-detection algorithm to measure executives' facial trustworthiness. We find that auditors charge 5.6% less audit fee to firms with trustworthy-looking CFOs than to those with untrustworthy-looking CFOs in initial audit engagements. Auditor tenure weakens the negative association between CFOs' facial trustworthiness and audit fee. Further evidence shows that CFO's facial trustworthiness is associated with neither financial reporting quality nor litigation risk.

Original languageEnglish
Article number101260
Number of pages23
JournalJournal of Accounting and Economics
Issue number1
Publication statusPublished - Feb 2020
Externally publishedYes

Bibliographical note

Our paper has benefitted a lot from insightful comments and constructive suggestions that we received from Joanna Wu (the editor) and the anonymous reviewer throughout multiple rounds of the review process. We thank Tracy Gu, Dan Simunic, and participants of research workshops/Ph.D. seminars at City University of Hong Kong, Fudan University, and Sun Yat-sen University, as well as the 2018 Annual Meeting of American Accounting Association for their valuable comments. We also appreciate Tang Peng of Bank of America Merrill Lynch for providing advanced computer techniques in image processing. Ray R. Wang acknowledges the financial support from Hong Kong Baptist University . Jeong-Bon Kim acknowledges partial financial support from the start-up grant of City University of Hong Kong. All errors are, of course, our own.


  • Audit fee
  • Auditor tenure
  • CFO
  • Cognitive bias
  • Facial trustworthiness


Dive into the research topics of 'Seeing is believing? Executives' facial trustworthiness, auditor tenure, and audit fees'. Together they form a unique fingerprint.

Cite this