How does audit firm emphasis on client relationship quality influence auditors’ inferences about and responses to potential persuasion in client communications?

Sanaz Aghazadeh and Kris Hoang

Accounting, Organizations and Society, 2020, vol. 87, issue C

Abstract: Many audit firms use client relationship management tools (e.g., client satisfaction surveys); however, overemphasizing relationship quality potentially makes auditors susceptible to client influence. Audit seniors, the main point of contact with clients, could be most vulnerable. In an experiment, we manipulate the presence of a potential client persuasion attempt in response to auditor inquiry (expressions of high confidence) and an audit firm’s emphasis on relationship quality (desire to achieve high client satisfaction ratings for the current year’s audit). We examine how these variables jointly influence the extent to which audit seniors infer persuasion from client explanations and, importantly, whether that inference is reflected in their actions. We find that auditors infer to an incrementally greater extent that client persuasion is present when they encounter high confidence when relationship quality is emphasized; however, they do not respond by collecting more relevant audit evidence under these conditions. Our findings suggest that auditors do not pursue audit evidence that could reduce their reliance on client-provided information and, thereby, limit client influence, even when they infer client persuasion to a greater extent.

Keywords: Auditor-client relationship; Persuasion; Confidence; Client satisfaction; Engagement pressure (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:aosoci:v:87:y:2020:i:c:s0361368218300783

DOI: 10.1016/j.aos.2020.101175

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