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The effect of client gender and negotiation style on auditors' proposed audit adjustments

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  • Hamrick, Jennifer
  • Schafer, Jennifer
  • DeZoort, Todd

Abstract

This study examines whether client gender affects the efficacy of two common negotiation strategies used by management when disputing a proposed audit adjustment. Eighty-two experienced auditors participated in an experiment in which CFO gender (female or male) and negotiation style (concessionary or contentious) were manipulated randomly between subjects. The results provide evidence of a gender-by-negotiation strategy interaction. Specifically, auditors are less likely to propose an audit adjustment for a male CFO who uses a contentious negotiation strategy as compared to the concessionary strategy. Conversely, auditors are more likely to propose an audit adjustment for a female CFO who uses a contentious negotiation strategy as compared to a male CFO who uses this same strategy. These findings indicate that the use of pressure-related tactics in negotiation is beneficial for male CFOs, but that female CFOs are penalized (as compared to male CFOs) for using contentious tactics.

Suggested Citation

  • Hamrick, Jennifer & Schafer, Jennifer & DeZoort, Todd, 2023. "The effect of client gender and negotiation style on auditors' proposed audit adjustments," Advances in accounting, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:advacc:v:62:y:2023:i:c:s0882611023000196
    DOI: 10.1016/j.adiac.2023.100660
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