Defense Date

Summer 7-1-2019

Degree Type


Degree Name



Business Administration

Committee Chair/First Advisor

Jennifer Schafer

Committee Member or Co-Chair

Todd DeZoort


Velina Popova


Client characteristics, one antecedent to auditor judgments (Hurtt, et al. 2013), have considerable influence on auditor-client negotiations of proposed audit adjustments, and ultimately audit quality. Client gender is one specific characteristic that has received recent attention for its influence on financial statement conservatism and audit fees. However, there is little empirical evidence on the influence of client gender on auditor-client negotiation outcomes. Client gender is expected to influence auditor judgments such that auditors are expected to propose lower audit adjustments to male (vs. female) clients due to the lower source credibility typically assigned to females (Kray, Galinsky, & Thompson, 2002; Kray, Thompson, & Galinsky, 2001). Further, this effect should be magnified when clients use a contentious (vs. concessionary) negotiation style as females have been found to incur social and economic penalties in other disciplines (known as the backlash effect) when they act outside expected gender norms.

A 2 x 2 between-subjects experiment was used to test the influence of client gender and negotiation style on the likelihood of auditors to propose an audit adjustment. Results indicate that contentious (vs. concessionary) tactics result in a lower likelihood of a proposed audit adjustment for male CFOs, but not for female CFOs. Further, female CFOs who use a contentious negotiation style experience significant backlash, resulting in a higher likelihood of a proposed audit adjustment compared to male CFOs. Contrary to research in other disciplines, CFO gender did not impact the CFO’s perceived credibility. Instead, the CFO’s use of contentious tactics resulted in lower perceived credibility than that of concessionary tactics across both CFO genders. However, results do not support that CFO credibility mediates the effect of CFO gender and negotiation style on auditor judgments.

This study’s findings have important implications for practitioners, researchers, and policymakers. The results highlight an auditors’ susceptibility to reducing proposed audit adjustments due to client pressure from male CFOs and, conversely, the use of concessionary tactics by female CFOs. Further, the conservative financial reporting noted with female CFOs in the archival literature may be partially explained by the negotiation strategies used by these CFOs in finalizing audit adjustments.

Available for download on Saturday, July 13, 2024

Included in

Accounting Commons