The Effects of Client Management Concessions and Ingratiation Attempts on Auditors’ Trust and Proposed Adjustments
Messier, W. F. Jr., J. C. Robertson and C. A. Simon. 2015. The effects of client management concessions and ingratiation attempts on auditors’ trust and proposed adjustments. Advances in Accounting 31 (1): 80-90.
Posted: 6 Mar 2012 Last revised: 23 May 2015
Date Written: March 6, 2015
We find that when a manager concedes on an initial potential adjustment, auditors place more trust in the manager and propose smaller aggregate adjustments. Furthermore, ingratiation has a marginally positive effect on auditor trust when the manager first concedes. However, our results indicate that the benefits to the client manager of conceding are limited in a key way: auditors are not more likely to propose aggregate adjustments that would allow the conceding manager to meet/beat the consensus analysts' EPS forecast.
Keywords: audit judgment, misstatements, trust, ingratiation
JEL Classification: M40, M41
Suggested Citation: Suggested Citation