Auditors Preference, Audit Consultation Relationship And Audit Negotiation Judgment

Audit negotiation is the main way to solve the controversial accounting issuesbetween auditors and customers, and frequently occurs, it is a key process of financialstatements audit, and audit negotiation outcomes will be reflected in the financialstatements, therefore, the negotiations will have a major impact on the audit qualityand financial statements quality. The auditor preference and audit consultationrelationship are two important background factors in audit negotiations, they mayimpact on auditors’ negotiation judgment, and then affecting the audit quality. Thisstudy is based on various psychological theories, experimentally examine the effectsof auditor preference and audit consultation relationship on auditors’ negotiationjudgments.The dissertation is divided into six chapters. Chapter one is an introduction;chapter two is literature review, review and comment the existing literatures aboutaudit negotiations and consultation in audit judgment; chapter three based onrespectively introducing auditors preferences and its’ formation, and the interpersonalrelationships in social interaction, analyze the effects of the auditors preferences andaudit consultation relationships on audit negotiation judgments using psychologicaltheories including motivation reasoning, preferences affect information processing,affect as information, emotion heuristics and relationship leading to trust, and developthe hypotheses; chapter four describes the experimental methods and the specificexperimental design; chapter five analyses the experimental data and tests hypothesesbased on participant analysis and manipulation check; chapter six concludes thedissertation by stating research conclusions, discussing the limitations, and severalfuture research directions.The major conclusions of the dissertation are as following:1. The theoretical analysis argues that the auditors of customers-orientedpreference process the information using the beliefs and strategies of best to meet thecustomer needs, doublt the audit evidences which are inconsistent with the preference, so that the preference of auditors affect their negotiation judgments; at the same time,the emotional factors associated with audit consultation relationship can become aninformation that affecting auditors decision making, the complicated decision makingsuch as audit consultation involved in advice adoption is easy to make a judgment byusing affect heuristic, audit consultation relationship is closely related to trust, whichwill make audit consultation relationship have impact on auditors’ negotiationjudgments; and, the effects of audit consultation relationship on audit negotiationjudgments will depends on auditor preference.2. The experimental results showed that auditor preferences affect auditors’negotiation judgments on disputing issues. Relative to the auditors ofcustomer-oriented preference, when the auditor preference was objective-oriented, thefinal record amount for inventory write-down which auditors determined was higher,the minimum acceptable inventory write-down of auditors was higher, the quantitybetween the determined final record amount for inventory write-down and advice wascloser, and the amount of position changed was smaller.3. The experimental results showed that audit consultation relationship affectedthe auditors’ negotiation judgments. Relative to general audit consultationrelationship, when audit consultation relationship was close, the final record amountfor inventory write-down which auditors determined was higher, the minimumacceptable inventory write-down of auditors was higher, the quantity between thefinal record amount for inventory write-down which auditors determined and advicewas closer, but the audit consultation relationship had no significant impact on theamount of position changed.4. The experimental results showed that in the situation of auditor preference wascustomer-oriented, when audit consultation relationship was close, auditors’ advicesacceptance degree could be improved and had impacted on their negotiationjudgments, that is, the quantity between the final record amount for inventorywrite-down which auditors determined and advice was closer, the final record amountfor inventory write-down which auditors determined was higher, the minimumacceptable inventory write-down of auditors was higher. However, auditor preferenceand audit consultation relationship have no significant interaction impact on the amount of position changed.