The influence of relationship partners on client managers’ negotiation positions

Mary Kate Dodgson, Christopher P. Agoglia and G. Bradley Bennett

Accounting, Organizations and Society, 2021, vol. 92, issue C

Abstract: To foster positive relationships with clients, audit firms often assign “relationship partners” (hereafter RPs) to engagements. Yet, little is known about RPs’ influence on disagreements that arise during fieldwork. We conduct an experiment with financial executives to examine the influence of RP intervention during auditor-client negotiations, and whether such influence depends on the extent to which the engagement partner and client have tried, albeit unsuccessfully, to resolve the issue (i.e., negotiation “ripeness”). We find that, without an RP, clients concede less during a more ripe negotiation stage (i.e., mutually hurting stalemate) than a less ripe stage. Yet, it is at this more ripe stage that certain RP intervention approaches can maintain clients’ trust in the audit firm and move them toward the auditor’s position (compared to no RP intervention). RPs can help end stalemates and minimize relationship impairment. We discuss implications for audit firms, regulators, and researchers.

Keywords: Relationship partners; Ripeness theory of third-party intervention; Auditor-client negotiation; Auditor-client relationships (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:aosoci:v:92:y:2021:i:c:s0361368221000167

DOI: 10.1016/j.aos.2021.101240

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