Factors Associated with Audit Client Relationships `At Risk'

Authors

Joseph V. Carcello, University of Tennessee - Knoxville
Dana R. Hermanson, Kennesaw State UniversityFollow
Roger H. Hermanson, Georgia State University

Document Type

Article

Publication Date

9-1998

Abstract

On occasion, rather than having a successful relationship, an audit client relationship is “at risk” -the client is giving consideration to changing auditors in the next few years. Can client relationships “at risk” be predicted or at least identified early enough to minimize the damage? This exploratory study provides insight into this important question. Based on a large sample ofFortune 1000 companies, the results indicate that client satisfaction, corporate controller work experience, and audit firm executive involvement in the engagement all are important determinants of the success of the relationship.