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Auditor–client negotiations over disputed accounting issues: Evidence from one of the Norwegian Big 4 firms

Auditor–client negotiations over disputed accounting issues: Evidence from one of the Norwegian... In this study we investigate data collected in an experiential survey from partners at one of the Norwegian Big 4 audit firms concerning 79 disputed accounting issues resolved by auditor–client negotiations. The study is designed to complement prior experimental findings on the auditors' use of negotiation strategies using a different research method (survey‐based retrospective recall). We first investigate which negotiation strategies and tactics audit partners use. We then test three hypotheses (one new and two others that extend prior findings) and find (i) the more precise the relevant accounting standard, (ii) the more general audit experience or task‐specific negotiation experience the auditor has, and (iii) the less positive the auditor–client relationship is that the more auditors agree that contending tactics were used in their own negotiation strategies. Finally, we test the relative importance of different context variables to the auditor's use of the contending strategy and the negotiated accounting outcome. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Auditing Wiley

Auditor–client negotiations over disputed accounting issues: Evidence from one of the Norwegian Big 4 firms

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Publisher
Wiley
Copyright
© 2018 John Wiley & Sons Ltd
ISSN
1090-6738
eISSN
1099-1123
DOI
10.1111/ijau.12129
Publisher site
See Article on Publisher Site

Abstract

In this study we investigate data collected in an experiential survey from partners at one of the Norwegian Big 4 audit firms concerning 79 disputed accounting issues resolved by auditor–client negotiations. The study is designed to complement prior experimental findings on the auditors' use of negotiation strategies using a different research method (survey‐based retrospective recall). We first investigate which negotiation strategies and tactics audit partners use. We then test three hypotheses (one new and two others that extend prior findings) and find (i) the more precise the relevant accounting standard, (ii) the more general audit experience or task‐specific negotiation experience the auditor has, and (iii) the less positive the auditor–client relationship is that the more auditors agree that contending tactics were used in their own negotiation strategies. Finally, we test the relative importance of different context variables to the auditor's use of the contending strategy and the negotiated accounting outcome.

Journal

International Journal of AuditingWiley

Published: Nov 1, 2018

Keywords: ; ;

References