Inconsistent responses to uncooperative client manager behavior: When auditors’ judgments and actions diverge

Auditors frequently encounter uncooperative clients that make evidence collection more difficult, but prior research points to conflicting perspectives on auditor reactions to this behavior. To add clarity, we conduct four studies. In Study 1, we predict and find that staff auditors increase their skeptical judgments in response to uncooperative clients, but also decrease their skeptical actions, creating an inconsistency that contradicts the audit risk model. We also find that the inconsistency is driven by participant concerns that taking actions against uncooperative clients will induce anxiety. In Study 2, we replicate these results, but also find that the inconsistency is reduced when actions require less interpersonal contact with the uncooperative client. A third experiment (Study 3) and an accompanying survey (Study 4) indicate that client personnel, especially those with more experience, anticipate staff auditor responses to less cooperative behavior and exploit these responses when misreporting or attempting to avoid auditor scrutiny. Altogether, this paper develops theory about inconsistent auditor reactions to uncooperative clients, has methodological implications, and is relevant to practitioners concerned about inconsistency between auditor judgment and action.