 The effects of client management concessions and ingratiation attempts on auditors' trust and proposed adjustmentsMessier William F., Jesse C. Robertson and Chad A. Simon Advances in accounting, 2015, vol. 31, issue 1, 80-90 Abstract: Prior research suggests client management often has incentives to achieve higher earnings. One way management can try to achieve incentives is by reducing the level of proposed audit adjustments before end-of-audit negotiations. In this study, we examine whether client management can achieve smaller proposed adjustments by using influence tactics, such as ingratiating and making concessions to less experienced auditors (staff and seniors). We find that when a manager concedes on an initial potential adjustment, auditors place more trust in the manager and propose smaller aggregate adjustments. Furthermore, ingratiation has a marginally positive effect on auditor trust when the manager first concedes. However, our results indicate that the benefits to the client manager of conceding are limited in a key way: auditors are not more likely to propose aggregate adjustments that would allow the conceding manager to meet/beat the consensus analysts' EPS forecast. Keywords: Audit adjustments; EPS; Incentives; Ingratiation; Trust (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:31:y:2015:i:1:p:80-90 DOI: 10.1016/j.adiac.2015.03.008 Access Statistics for this article Advances in accounting is currently edited by Dennis Caplan More articles in Advances in accounting from Elsevier |
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