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THE EFFECTS OF AN AUDITOR’S COMMUNICATION MODE AND PROFESSIONAL TONE ON CLIENT RESPONSES TO AUDIT INQUIRIES

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Abstract
Recent audit research has indicated that junior auditors tend to use e-mail for client inquiries. Additionally, audit firms have expressed concerns regarding the ability of junior auditors to communicate professionally. In this study, I investigate whether receiving an auditor inquiry via e-mail differentially affects client responses as compared to more traditional modes of inquiry and whether those responses are affected by the auditor’s professional tone. In an experiment, experienced business professionals respond to a request for information from an auditor regarding a potential accounting adjustment. I varied the communication mode of the request (e-mail, audio, or visual) and the professional tone of the communication (more vs. less professional tone) and then measured the extent to which participants revealed information that either supported or did not support the client’s accounting position. I find that an auditor e-mail inquiry results in client responses that are more biased towards items that support the client’s position as compared to audio or visual inquiries. In addition, I find that clients respond in a more biased manner when the inquiry is worded in a less professional tone as compared to a more professional tone and that this tendency may be exacerbated when they receive the request via e-mail. Further underscoring the implications of these findings for audit outcomes, I find that clients are less likely to agree with an auditor’s proposed income-decreasing adjustment if the client did not personally reveal applicable information to the auditor.
Type
dissertation
Date
2014
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Advisors
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