ePublications@bond

Auditor orientation, strategies and tactics in audit negotiations

Janice Hollindale, MCom (Awarded in 2008)
Bond University, Faculty of Business, Technology and Sustainable Development

Advisor

Ray McNamara

Abstract

This study’s primary objectives are to establish the dimensions, strategies, and tactics used by auditors in the negotiation of sensitive disclosure issues with clients. These issues are typically addressed at the end of the audit and are the primary concern of the audit partner and senior manager. This study uses the tactics established in the negotiation research to test if auditors use the same groups of tactics, and whether these tactics are related by some underlying dimensions, and their relevant strategies. Multidimensional scaling found that there are four dimensions to the tactics that auditors use. During negotiations with their clients, auditors employ tactics representing the underlying dimensions which can be interpreted as “Concern for Self”, “Concern for Client”, “Concern for Others”, and “Concern for Accounting Principles”. Results of cluster analysis established four primary classifications to the 38 auditor tactics. These are “Facilitating”, “Contextual”, “Forcing/asserting”, and “Appeal to authority”. Within these four classifications, twelve sub-categories were observed. These findings reinforce the complexities inherent in the resolution of an audit conflict, and suggest that auditors group together certain tactics for use as called for in the circumstances with which they are dealing. This research contributes to theory within the fields of auditing and general negotiation because it has established that the two-dimensional model of concern that has formed the basis of much behavioural research is insufficient to describe an auditor’s responsibilities. There are four dimensions of concern. While some researchers have proposed a three-dimensional model of negotiation for auditors, the fourth dimension identified in this study is a contribution. This research expands current knowledge fundamental to the audit discipline by establishing the negotiation tactics used by auditors and their underlying multidimensionality, and thus has extended the knowledge of audit conflict management beyond that of strategy-level. Accordingly,this research is beneficial to practicing auditors and for the education of auditors.

Year Manuscript Completed

2008

Subject Category

Economics, Commerce - Business (0505)

Keywords

Confidential communications Australia Auditing; Disclosure of information Australia Auditing

Rights

The author has granted permission for Bond University to archive and make this thesis available in this repository. The author retains all proprietary rights such as patent rights, the right of attribution as well as the right to use all or part of the thesis in future works (such as articles or books). Use of this thesis is limited to private study or research in accordance with the Commonwealth of Australia Copyright Act, 1968 as amended.

Language

EN