New evidence on drivers influencing negotiation between financial auditors and their clients concerning resolution on the audit opinion. The case of an emerging economy

Controversies concerning the main drivers of the auditor-client relationship have been discussed over time, although interest in this topic appears to have slightly declined, with recent studies mainly addressing auditors’ competencies, independence, audit fees and quality of audit services. However, the current business environment shows significant concerns on the high level of economic uncertainty, and complexity of business models, even though auditors have shown interest in adopting emerging technologies. Within this VUCA-BANI framework, auditors are pushed to reconsider the implications of those transformations into their own capabilities, in order to provide adequate solutions to their customers. Instead, the auditor-client relationship does not relate only to discussion on the area of enhancing clients’ or auditors’ dynamic capabilities to become more resilient, and to ensure competitive audit fees, but also to a continuous communication process that influences the outcome of each assurance engagement, many times depending on a negotiation process aimed to limit auditors’ liability and increase clients’ satisfaction. The purpose of this study is to investigate the main drivers influencing financial auditors’ choice for different negotiation strategies used during reconciliation meetings with clients. The research is based on a survey disseminated through active financial auditors from Romania. Following a robust theoretical framework, including the client-auditor negotiation dynamic theory, the research design consists of multivariate data analysis. This paper adds insights into the literature, on a topic that is mainly discussed in research settings consisting of highly developed economies, neglecting the specifics of emerging economies. The study aims to provide insights on drivers of auditors’ choice for negotiation strategies and related tactics in the stage of meetings of reconciliation with clients. Research results indicate that the auditors’ position of negotiation is significantly influenced by client pressure and the quality of the auditor-client relationship.

Authors

Publication Details

Journal
E+M Ekonomie a Management
Published
2025-01-01
DOI
https://doi.org/10.15240/tul/001/2025-2-009
Primary Topic
Auditing, Earnings Management, Governance
Type
article
Field-Weighted Citation Impact
0.00
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article

New evidence on drivers influencing negotiation between financial auditors and their clients concerning resolution on the audit opinion. The case of an emerging economy

Anca Bălan, Alin-Constantin Dumitrescu, Cristian Lungu, Ovidiu-Constantin Bunget et al.
E+M Ekonomie a Management
Auditing, Earnings Management, Governance
article

New evidence on drivers influencing negotiation between financial auditors and their clients concerning resolution on the audit opinion. The case of an emerging economy

Anca Bălan, Alin-Constantin Dumitrescu, Cristian Lungu, Ovidiu-Constantin Bunget, Valentin Burcă
article en

Abstract

Controversies concerning the main drivers of the auditor-client relationship have been discussed over time, although interest in this topic appears to have slightly declined, with recent studies mainly addressing auditors’ competencies, independence, audit fees and quality of audit services. However, the current business environment shows significant concerns on the high level of economic uncertainty, and complexity of business models, even though auditors have shown interest in adopting emerging technologies. Within this VUCA-BANI framework, auditors are pushed to reconsider the implications of those transformations into their own capabilities, in order to provide adequate solutions to their customers. Instead, the auditor-client relationship does not relate only to discussion on the area of enhancing clients’ or auditors’ dynamic capabilities to become more resilient, and to ensure competitive audit fees, but also to a continuous communication process that influences the outcome of each assurance engagement, many times depending on a negotiation process aimed to limit auditors’ liability and increase clients’ satisfaction. The purpose of this study is to investigate the main drivers influencing financial auditors’ choice for different negotiation strategies used during reconciliation meetings with clients. The research is based on a survey disseminated through active financial auditors from Romania. Following a robust theoretical framework, including the client-auditor negotiation dynamic theory, the research design consists of multivariate data analysis. This paper adds insights into the literature, on a topic that is mainly discussed in research settings consisting of highly developed economies, neglecting the specifics of emerging economies. The study aims to provide insights on drivers of auditors’ choice for negotiation strategies and related tactics in the stage of meetings of reconciliation with clients. Research results indicate that the auditors’ position of negotiation is significantly influenced by client pressure and the quality of the auditor-client relationship.

E+M Ekonomie a ManagementVol. 28(2)
Openalex Percentile: Top 81%
Auditing, Earnings Management, Governance
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