Determinants of behavioural intentions in the audit market

Abstract

PurposeThis study uses conceptualizations and models of service quality and behavioural intentions from the service marketing and audit quality literature to investigate the influence of supervisory board members’ perceptions about various dimensions of audit quality on their behavioural intentions. These dimensions pertain to auditor’s technical competence, functional (service) quality and auditor independence.Design/methodology/approachA survey of supervisory board members of large and medium companies in The Netherlands is made to identify audit quality dimensions. The multivariate analysis is used to identify the quality dimensions influencing supervisory board members’ behavioural intentions.FindingsOverall, the author’s results indicate that the quality dimensions identified in this study have significant influence mainly in the supervisory board members’ intention to refer their auditors to an acquaintance. In this regard, the salient determinants are the functional quality dimensions and auditor independence. The technical quality dimensions are not found to be crucial. In contrast, most of the quality dimensions are not significant determinants of supervisory board members’ intention to retain or recommend the purchase of non-audit services from the auditor albeit having a minor influence. The results have some implications for regulators and audit firms.Research limitations/implicationsThe author’s results are limited by the low response rate that did not allow us to conduct factor analysis on all the functional and technical variables at the same time.Originality/valueThis paper is the first to integrate service quality and behavioural intentions concepts from the marketing literature and auditing literature and apply it in a corporate governance setting.