Critics of the legal system argue that the use of lay jurors to adjudicate auditor negligence claims results in non-meritorious decisions of auditor liability. Palmrose (2006) therefore proposes that the courts rely on panels of experienced auditors to evaluate the merits of auditor negligence claims and make recommendations to the courts. There is, however, scant evidence to indicate how auditors' and lay evaluators' judgments might differ in cases of alleged auditor negligence. Our study addresses this gap in the literature by providing theory and empirical evidence that elucidates several systematic differences between auditors' and lay evaluators' judgments. Results of an experiment indicate that auditor evaluators are less reliant on plaintiff losses as evidence than lay evaluators, but—consistent with social identity theory—experience greater empathy for auditor defendants. Consequently, auditor evaluators consistently provide lower assessments of auditor liability than lay evaluators, irrespective of audit quality. In addition, results of the experiment indicate that different legally irrelevant inputs primarily determine both auditor and lay evaluators' negligence verdicts—emotional reactions for auditor evaluators and plaintiff losses for lay evaluators. Finally, results are mixed as to whether auditor evaluators' judgments are more sensitive to varying levels of audit quality than lay evaluators' judgments.