Affiliation:
1. University of Nevada, Reno
2. University of Kentucky
Abstract
ABSTRACT
This study investigates how tactics employed by a client during negotiations impact experienced auditors' propensity to waive material adjustments and whether the salience of a strict concurring partner review affects the decision to waive. Different psychological theories predict that auditors may either become more contentious or more concessionary when facing a contentious client. Our results suggest that auditors are more likely to waive material adjustments when clients use contending tactics, but not concessionary tactics. However, we also find that making a strict concurring partner review salient reduces this propensity. Further, we find that a theory not previously applied to this line of research, the level-of-aspiration theory, may predict how auditors react. These results offer additional insights into auditor-client negotiations and reveal that existing quality controls can influence these negotiations.
Publisher
American Accounting Association
Subject
Organizational Behavior and Human Resource Management,Accounting
Reference36 articles.
1. American Institute of Certified Public Accountants (AICPA).2015. A Firm's System of Quality Control. Statement on Quality Control Standards No. 10. New York, NY: AICPA.
2. Conservatism and auditor-client negotiations;Antle;Journal of Accounting Research,1991
3. A comparison of auditor and client negotiation decisions;Bame-Aldred;Accounting, Organizations and Society,2007
4. The effect of deadline pressure on pre-negotiation positions: A comparison of auditors and client management;Bennett;Contemporary Accounting Research,2015
5. The effect of past client relationship and strength of the audit committee on auditor negotiations;Brown-Liburd;Auditing: A Journal of Practice & Theory,2011
Cited by
9 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献