Open Access. Powered by Scholars. Published by Universities.®
Finance and Financial Management
Department of Accounting and Finance Faculty Scholarship and Creative Works
Articles 1 - 1 of 1
Full-Text Articles in Business
The Relationship Of Cognitive Effort, Information Acquisition Preferences And Risk To Simulated Auditor–Client Negotiation Outcomes, Gary Kleinman, Dan Palmon, Kyunghee Yoon
The Relationship Of Cognitive Effort, Information Acquisition Preferences And Risk To Simulated Auditor–Client Negotiation Outcomes, Gary Kleinman, Dan Palmon, Kyunghee Yoon
Department of Accounting and Finance Faculty Scholarship and Creative Works
The auditor–client relationship is a legally-mandated relationship in which one party, the auditor, is hired and paid by the auditee (client) to inform third party stakeholders as to whether the client firm’s financial statements are presented in conformity with national financial accounting standards. When these statements do not meet the criteria for acceptable financial statements, a negotiation situation may arise in which the auditor is presumed to act in the best interests of shareholders and creditors who have no independent knowledge of the auditor’s findings. The client management may then feel forced to defend its numbers. The result is a …