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

See all articles by William F. Messier, Jr.

William F. Messier, Jr.

NHH Norwegian School of Economics

Jesse C. Robertson

University of North Texas

Chad Simon

Utah State University - School of Accountancy

Date Written: March 6, 2015

Abstract

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

Messier Jr, William F. and Robertson, Jesse C. and Simon, Chad A., The Effects of Client Management Concessions and Ingratiation Attempts on Auditors’ Trust and Proposed Adjustments (March 6, 2015). 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., Available at SSRN: https://ssrn.com/abstract=2016456 or http://dx.doi.org/10.2139/ssrn.2016456

William F. Messier Jr (Contact Author)

NHH Norwegian School of Economics ( email )

Helleveien 30
N-5045 Bergen
Norway
678-386-8634 (Phone)

Jesse C. Robertson

University of North Texas ( email )

1155 Union Circle #305340
Denton, TX 76203
United States

Chad A. Simon

Utah State University - School of Accountancy ( email )

School of Accountancy
Jon M. Huntsman School of Business
Logan, UT 84322-3540
United States

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