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Behind the audit report : a descriptive study of discussion and negotiation between auditors and directors

Beattie, Vivien and Fearnley, Stella and Brandt, Richard (2000) Behind the audit report : a descriptive study of discussion and negotiation between auditors and directors. International Journal of Auditing, 4 (2). pp. 177-202. ISSN 1090-6738

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This paper presents direct evidence concerning the extent, nature, and outcome of interactions between the two primary parties in the auditor-client relationship — finance directors (FDs) and audit engagement partners (AEPs). A questionnaire instrument is used to elicit the frequency with which, over a three year period, an extensive set of 46 audit and audit-related issues is discussed, is negotiated, and results in a change to either the accounting numbers or disclosures. Three hundred FDs and 307 AEPs of listed UK companies are surveyed, with response rates of 51% and 80%, respectively. Principal findings are that: (i) compliance issues dominate discussions, while accounting and fee issues dominate negotiations; (ii) audit committees generally reduce the level of negotiation and increase the level of discussion, suggesting that the overall degree of confrontation declines; and (iii) in the majority of cases (57%), negotiation results in a change to the financial statements, providing evidence of the auditor's influence on the financial statements.

Item Type: Journal Article
Journal or Publication Title: International Journal of Auditing
Uncontrolled Keywords: audit ; audit committees ; audit process ; conflict ; discussion ; interaction ; negotiation ; relationship
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 66450
Deposited By: ep_importer_pure
Deposited On: 17 Sep 2013 09:11
Refereed?: Yes
Published?: Published
Last Modified: 29 May 2018 00:23
Identification Number:

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