Strategy Of Customer Concessions In Negotiations With The Auditors To Judge

The audited financial statements of a client could be considered a product of negotiation process between the auditor and client's management. The impact of auditing negotiation on the quality of audited financial statements, the auditor's and client's benefits and sound development of the capital market is impotent. A general feature of auditing negotiation process is the concession of auditor and client, therefore the client's concession strategy may be potentially influence the auditor's negotiation judgments, furthermore the audit quality. This study is based on the theory of reciprocity, with the CPA as subjects, experimentally examine the effects of three types of concession strategies that are used by client on the auditor's immediate negotiation judgments and perceptive negotiation judgments of the client.The dissertation is divided into eight chapters. Chapter 1 is an overall introduction; Chapter 2 is literature review of the negotiation research in psychology and auditing, and the comments on studies of auditing negotiation strategy; Chapter 3 is an analysis of the relationship between auditing negotiation and audit quality; Chapter 4 analyses theoretically the effect of client negotiation strategies on the auditor's immediate negotiation judgments and perceptive negotiation judgment of client, and develops research hypotheses; Chapter 5 describes the designs of experiment; Chapter 6 discusses the experimental results, tests the research hypotheses; Chapter 7 analyses the auditor's offers and strategies in auditing negotiation, using the other data that also gathered from experiment, and then constructs the mediation model; Chapter 8 concludes the dissertation by stating its research conclusions, discussing its limitations, and highlighting several issues for future research.The major conclusions of the dissertation are as follows:1. The theoretic analysis argues that the reciprocity principle could have psychological impact on auditor and thus influence their behavior. According to the reciprocity principle, while the client concession or contending in the auditing negotiation process, the auditor who was influenced by positive or negative reciprocity should reciprocate the concession or contending.2. The experimental results indicate that the client's concession strategies have a significant effect on the auditor's concession frequency in the negotiation process. The auditor's concession frequency is highest when the client offer gradual concession, and lowest when the client offer delayed concession, and be placed in the middle when the client offer early concession.3. The experimental results indicate that the client's concession strategies have a significant effect on the auditor's final offer at the end of negotiation. The auditor's final offer is lowest when the client offer gradual concession, and highest when the client offer delayed concession, and be placed in the middle when the client offer early concession.4. The experimental results indicate that the client's concession strategies have a significant effect on the auditor's satisfaction with the client when the negotiation finished. The auditor's satisfaction with the client is highest when the client offer gradual concession, and lowest when the client offer delayed concession, and be placed in the middle when the client offer early concession.5. The experimental results indicate that, when the client offer gradual concession, the client's satisfaction with the auditor's final offer that is percepted by the auditor is significant higher than the client offer early and delayed concession, but the client's satisfaction with the auditor's final offer that is percepted by the auditor have no significant difference between the client offer early and delayed concession.6. The experimental results indicate that the client's concession strategies have a significant effect on the auditor's perception of the client's intention to continue a relationship with auditor. The auditor's perception of the client's intention to continue a relationship with auditor is highest when the client offer gradual concession, and lowest when the client offer delayed concession, and be placed in the middle when the client offer early concession.7. The experimental results indicate that the auditor's concession frequency and final offer are all have the mediating effect. The auditor's concession frequency partially mediate the effect of client's concession strategies on the auditor's final offer, and the auditor's final offer fully mediate the effect of the auditor's concession frequency on the auditor's satisfaction with the client.8. The experimental results indicate that the auditor's final offer and perception of the client's satisfaction with the auditor's final offer are all have the mediating effect. The auditor's final offer fully mediate the effect of the client's concession strategies on the auditor's perception of the client's satisfaction with the auditor's final offer, and the auditor's perception of the client's satisfaction with the auditor's final offer partially mediate the effect of the auditor's final offer on the auditor's perception of the client's intention to continue a relationship with auditor.