Auditor selection of negotiation strategies : the effect of motivational factors and bargaining power under a throughput model

Baroudi, Sarra

Abstract

Motivational factors and bargaining power have been recognized by scholars and practitioners alike, as important elements for negotiation strategies. However, there has been little effort to date to empirically or theoretically study the effect of these factors in the context of auditor-client negotiation while adopting a decision-making process framework. We present a Throughput Model framework that describes the decision-making process of auditors when they make decisions about negotiation strategies. The model depicts how (a) perception of motivational factors and (b) bargaining power affect the choice of negotiation strategy and identifies different pathways auditors use in their decision about negotiation strategies.

In our experiment, we manipulate engagement risk perception, client pressure, corporate mechanisms strength as well as financial information. We. investigate their effects on auditor decision making about the likelihood of accepting client's management alternative and on the negotiation strategies choice. We find that only engagement risk perception influences auditor's propensity to accept aggressive accounting treatments of the client. This in turn influences the use of all the negotiation strategies. On the other hand, client pressure only has effect on compromising strategies while bargaining power influences the concessionary strategy of auditors. Moreover, two dominant decision making pathways are used by auditors, i.e. P→J→D and P→D.

Citation

Baroudi, S. Auditor selection of negotiation strategies : the effect of motivational factors and bargaining power under a throughput model. (Thesis). University of Hull. https://hull-repository.worktribe.com/output/4219646

• Thesis Type: Thesis
• Deposit Date: Oct 27, 2017
• Publicly Available Date: Feb 23, 2023
• Keywords: Business
• Public URL: https://hull-repository.worktribe.com/output/4219646
• Additional Information: Business School, The University of Hull
• Award Date: Dec 1, 2016