SUMMARY
This study investigates whether attestation
influences users’ perceptions of assertion
credibility. We also examine whether
characteristics of the attestation firm (i.e. firm size,
CPA or financial services firm) influence users’
perceptions of assertion credibility.
The context for our investigation is the assertion
by investment managers that they are reporting
their performance results in accordance with
the Performance Presentation Standards (PPS)
developed by the Association for Investment
Management and Research in the United States.
The PPS are voluntary reporting standards that can
be used by investment managers when reporting
their historical performance results. Attestation of
asserted PPS compliance can be purchased by the
asserter, but is not required. Any independent third
party can perform this attestation.
Our results are based on an experimental
investigation involving 60 pension fund sponsors
that use investment managers’ performance
reports. Pension fund managers received a case
packet that included information on investment
managers’ performance. The results reported in
the case materials included a statement regarding
compliance with the PPS and whether the
compliance was attested. The pension fund
managers’ perceptions based upon the case
materials were collected and compared.
Research Note: The Influence of
Attestation on Users’ Perceptions of
Assertion Credibility in the Asset
Management Industry
Neil Fargher
1
* and Audrey A. Gramling
2
1
University of New South Wales, Australia
2
Georgia State University, US
This study investigates whether attestation of asserted
compliance with specified standards influences users’
perceptions of assertion credibility. We find that, when an
investment manager reports above average performance, users
perceive the investment manager’s assertion to be somewhat
more credible when an independent third party has attested to
the assertion. When performance results have been attested by
an accounting firm, pension fund sponsors perceive that Big
Six firms provide a higher level of credibility than do non-Big
Six firms. We do not, however, find a difference in perceptions
between attestations provided by Big Six firms and attestations
provided by financial services firms.
Key words: attestation, assurance services
International Journal of Auditing
Int. J. Audit. 7: 87–100 (2003)
Received September 2000
Revised July 2001
Revised June 2002
Accepted July 2002
*Correspondence to: University of New South Wales, School
of Accounting, Sydney, NSW 2052, Australia. Email:
N.Fargher@unsw.edu.au
ISSN 1090–6738
© Blackwell Publishing Ltd 2003. Published by Blackwell Publishing, 9600 Garsington Road,
Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.