What's Happening?
A recent study published in the journal Contemporary Accounting Research highlights the detrimental effects of client incivility on audit quality. The research involved an experiment with 114 senior auditors
and a survey of 70 auditors across the U.S. and Canada. It found that rude behavior from clients, such as questioning auditors' procedures or skills, can lead auditors to be less likely to challenge aggressive accounting practices. The study suggests that active coping strategies, like involving a senior colleague, can mitigate these negative effects and improve auditors' professional judgment.
Why It's Important?
The findings underscore the importance of addressing client incivility in the audit profession to maintain high audit quality. As auditors are less likely to challenge aggressive accounting when faced with rudeness, this could lead to financial misreporting and affect stakeholders relying on accurate financial statements. Audit firms may need to implement training and open dialogue on coping strategies to ensure auditors can effectively manage client incivility and uphold audit standards.
What's Next?
Audit firms are encouraged to assess the risks associated with uncivil clients and consider broader remedies, such as training programs, to equip auditors with effective coping mechanisms. This proactive approach could help auditors maintain their judgment and mental well-being, ultimately preserving audit quality.
Beyond the Headlines
The study raises ethical considerations about the professional environment auditors face and the potential long-term impact on their mental health. It also highlights the need for a cultural shift within client companies to foster respectful interactions with service providers.
