Richard Fontaine

Audit Clients Want to Cooperate with their External Financial Auditor, but also Remain at Arm’s Length: a Canadian Survey Study

The objective of our research was to determine what motivates clients to cooperate while at the same time remaining independent with their financial auditors. Both cooperation (working closely) and independence (not being too close) are important in an auditor-client relationship, even though they are opposing characteristics in the Relationship Marketing literature. The problem is that an overly cooperative relationship has been considered a threat to auditor independence; and there is very little research into what would motivate audit clients to be cooperative while respecting the auditor’s need to remain independent. To help address this issue, we surveyed 1090 audit clients from Canadian corporations and our results show that audit clients want more of a value-added service from auditors including enhanced communication, resulting in a trusting and cooperative relationship with their financial auditor. Surprisingly the audit clients also want the auditor to remain somewhat distant and independent. Our results contribute to the financial auditing literature as well as to the audit practice

Does client participation in an external audit affect their satisfaction with the audit service

Purpose - – The purpose of this paper is to determine if self-serving bias affects audit client satisfaction level with their audit firm. Design/methodology/approach - – A 2×2 between-subjects design is used, where the authors experimentally manipulate the level of client involvement in the audit and the extent of value-added services the client received. Findings - – Using a sample of 115 financial managers (audit clients), the authors find no evidence that self-serving bias exists among clients in the experimental setting. Rather, they find that clients appear to be more satisfied with their auditor when they (clients) participate more in the service exchange. Research limitations/implications - – The research is limited to a specific context within the privately held company audit setting. Practical implications - – Audit firms may consider encouraging their privately held clients to participate more in the audit process by clearly communicating expectations and providing clients with audit preparedness materials, including templates and training where necessary. Originality/value - – Although the self-serving bias has been shown to exist in the marketing literature, the authors present a setting where the relationship between service provider (auditor) and customer (client) is such that the self-serving bias may not hold.