The power of small talk: How small talk and psychological ownership influence managers’ communication defensiveness during audit inquiry

Nikki L. MacKenzie and Christopher P. Agoglia

Accounting, Organizations and Society, 2025, vol. 114, issue C

Abstract: The audit process requires frequent communication between auditors and client managers. Often, the most knowledgeable managers are involved in the work relating to an audit inquiry. As such, they may feel a sense of “ownership” over the related work. When threatened, psychological ownership can cause individuals to behave defensively, which may pose a challenge for auditors. Theory suggests that how auditors begin these inquiries (e.g., using small talk) may influence managers' behavior. Through two experiments, we find that managers with higher psychological ownership are more likely to respond defensively to an audit inquiry relating to a potential inventory obsolescence issue. Additionally, we find that the use of professional small talk magnifies managers’ defensive responses and some evidence that social small talk helps mitigate defensive responses. Further, small talk improves the perceived rapport between the manager and the auditor, compared to no small talk.

Keywords: Auditor-client relationships; Audit inquiry; Psychological ownership; Social small talk; Professional small talk; Manager communication defensiveness (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:aosoci:v:114:y:2025:i:c:s0361368225000042

DOI: 10.1016/j.aos.2025.101592

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