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People-Centric Skills
Use your interpersonal and communication skills as a financial professional to work successfully with clients
Embark on a journey to further develop your career when you read People-Centric Skills: Interpersonal and Communication Skills for Financial Professionals, 2 nd Edition. Business leaders consider employee communication skills and critical thinking abilities as essential elements for success. In their work, all professionals must communicate clearly and rely on their interpersonal skills to be successful.
This second edition of People-Centric Skills shares the fictional story of Dalton Zimmer, executive coach and public speaker. Dalton, all the while juggling his business, kids and social life, provides coaching and communication strategies for handling challenging situations faced by his clients.
This insightful narrative will help you expand communication and soft skills as a CPA, auditor, financial planner or other financial professional.
As Generation Z is entering the work force, the communication gap between Z and Boomers or Generation X is widening significantly. New to the second edition, you'll find a discussion of communication between generations and how to bridge them as a financial professional.
You can be a more people-centric leader as you engage with a wide range of clients and associates. This book can be a first step to improving interpersonal and communication skills as you continue to develop in your career.
eBook
Managing the Auditor-Client Relationship Through Partner Rotations
While current audit standards explicitly state engagement partner tenure requirements, firms have flexibility in managing the rotation process. We conduct semi-structured interviews with 20 U.S. audit firm partners who share their experiences on topics including how they identify appropriate candidate partners and what efforts they undertake to manage relationships with clients post-rotation. We investigate firms' motivation to manage the auditor-client relationship through the lens of Social Exchange Theory (SET), and we consider how likely outcomes of this rotation process map onto regulators' intent that a newly rotated partner provides a fresh perspective to the audit. Our study informs regulators and investors about the process by which engagement partners are selected for rotation, documenting that partner assignment is typically not random. Further, our finding that partner rotation is an extended process (rather than a single discrete event) has implications for audit researchers investigating the effects of partner rotation.
Journal Article
In auditor we trust: 44 years of research on the auditor-client relationship and future research directions
Purpose>This study aims to review the auditor-client relationship (ACR) literature spanning 1976 to 2019 to provide future research directions.Design/methodology/approach>The study analysed 140 articles from the Web of Science database, authored by 259 scholars across 28 countries and published in 47 journals. It identified three major research streams to understand the ACR dynamics: auditor tenure, ACR attributes and auditor-client negotiation.Findings>Three major findings emerged based on this review. First, few studies examine auditor-client negotiation relative to other streams; thus, it offers scope for further research. Second, given that various fields have used diverse frameworks as theoretical underpinnings in prior studies, continuing this trend can better portray ACR from multiple perspectives. Finally, despite strong international regulations on ACR aspects such as auditor independence, tenure and rotation, implementation in several countries warrants special considerations, specifically on legal enforcement and investor protection, given diverse cultures and country-level institutional environments.Originality/value>This study contributes to the synthesis of existing and emerging research streams and provides future research suggestions.
Journal Article
People-Centric Skills
This book can be a first step to improving interpersonal and communication skills as you continue to develop in your career. --
eBook
The Effect of the Social Mismatch between Staff Auditors and Client Management on the Collection of Audit Evidence
This study provides both survey and experimental evidence to consider how social interactions between staff-level auditors and client management may affect staff auditors' perceptions and influence their decisions regarding the collection of audit evidence. During fieldwork, staff-level auditors have extensive interaction with client management. Survey evidence suggests that these staff-level auditors are often \"mismatched\" with client management, in terms of their experience, age, and accounting knowledge. Experimental results indicate that staff-level auditors may reduce the extent to which they collect evidence to avoid these interactions. Finally, the use of email communication with client management helped to mitigate the reduction in evidence collected caused by avoiding in-person interactions. Interestingly, when not collecting all the evidence, approximately half of the participants documented their findings in a vague or inappropriate manner, which would likely reduce the likelihood that reviewing auditors would identify a problem. Given the extent of audit evidence collected by young staff auditors, these findings have direct implications for workpaper and audit quality.
Journal Article
Auditor-Client Relationship from a Digital Context Perspective: Evidence from France, Luxembourg and Morocco
Research Question: How is audit digitalization affecting the dynamics between auditors and their clients? Motivation- Digital technology expansion seems to concern all fields including financial audit field. This fact is likely to impact different aspects in the auditor-client relationship. We have therefore chosen to explore those aspects and analyse how digital innovation is likely to impact them. Idea: The idea of the present study is to investigate whether digital technology expansion in auditing is likely to enhance the relationship between financial auditors and their clients. Data: The study used a qualitative approach based on 10 semi-structured interviews with auditors from France, Luxembourg, and Morocco. With an average answer rate of 20%, we analysed data through thematic analysis. Objective- The study aims to explore how digitalization reshapes the auditor–client relationship, with a focus on the main determinants that influence this transformation from auditors’ perspectives. Findings: The results of this study showed that the expansion of digital technology in auditing improved quality, which is one of the most important criteria generating clients’ satisfaction. Nonetheless, considering digital tools advantages in terms of remote working, we found that this expansion should not be reflected at the expense of proximity vis-à-vis audited entities. Further, we found that auditors are making great efforts to ensure security and confidentiality of their client’s financial information, which contributes to strengthen customers’ trust towards their auditors. Finally, this study showed that fixing reasonable audit fees is essential to maintain a good relationship with clients. In this context, it may be noted that these fees consider the amortization of technological investments supported by audit firms. Contribution: This study explains how digitization influences auditor-client relationship. It offers researchers and professionals valuable insights, likely to be used to enhance the comprehension of auditor-client specifics in the digital era.
Journal Article
Competence trust, goodwill trust and negotiation power in auditor-client relationships
PurposeThe purpose of this paper is to investigate how competence trust (i.e. trust regarding the ability of the counterpart) and goodwill trust (i.e. trust regarding the benevolence and integrity of the counterpart) affect the probability that the auditor or the client stand up to the respective negotiation partner’s position in situations of disagreement in the auditing relationship.Design/methodology/approachTwo experiments were conducted, one with 149 auditors and one with 116 chief financial officers (CFOs). Both auditors and CFOs had to indicate the likelihood that they stand up to the other party’s preferred position in a disagreement on the materiality of unrecorded liabilities. The data derived from these experiments were analyzed using hierarchical OLS.FindingsThe results indicate that both auditors and CFOs who take their respective negotiation partner in the audit for highly competent are less likely to stand up to them in situations of disagreement. Interestingly, goodwill trust appears to be irrelevant for the negotiation outcome.Practical implicationsThe findings are highly relevant for regulators, because they inform about the crucial importance of competence trust for the auditing negotiation outcome and thus put the so-called “trust-threat” into perspective.Originality/valueThe study adds to the literature on the role of the context for auditor-client negotiations by exploring the role of two distinct forms of trust on the outcome of these negotiations.
Journal Article
New evidence on drivers influencing negotiation between financial auditors and their clients concerning resolution on the audit opinion. The case of an emerging economy
Controversies concerning the main drivers of the auditor-client relationship have been discussed over time, although interest in this topic appears to have slightly declined, with recent studies mainly addressing auditors’ competencies, independence, audit fees and quality of audit services. However, the current business environment shows significant concerns on the high level of economic uncertainty, and complexity of business models, even though auditors have shown interest in adopting emerging technologies. Within this VUCA-BANI framework, auditors are pushed to reconsider the implications of those transformations into their own capabilities, in order to provide adequate solutions to their customers. Instead, the auditor-client relationship does not relate only to discussion on the area of enhancing clients’ or auditors’ dynamic capabilities to become more resilient, and to ensure competitive audit fees, but also to a continuous communication process that influences the outcome of each assurance engagement, many times depending on a negotiation process aimed to limit auditors’ liability and increase clients’ satisfaction. The purpose of this study is to investigate the main drivers influencing financial auditors’ choice for different negotiation strategies used during reconciliation meetings with clients. The research is based on a survey disseminated through active financial auditors from Romania. Following a robust theoretical framework, including the client-auditor negotiation dynamic theory, the research design consists of multivariate data analysis. This paper adds insights into the literature, on a topic that is mainly discussed in research settings consisting of highly developed economies, neglecting the specifics of emerging economies. The study aims to provide insights on drivers of auditors’ choice for negotiation strategies and related tactics in the stage of meetings of reconciliation with clients. Research results indicate that the auditors’ position of negotiation is significantly influenced by client pressure and the quality of the auditor-client relationship.
Journal Article
Whistleblowing allegations and auditor resignation: should I stay or should I go?
PurposeAlthough regulations to prevent financial wrongdoing exist in the USA, whistleblowing (WB) remains important in deterring unethical corporate behavior. The purpose of this study is to address the tension in the audit continuance literature by examining auditor resignations following a WB allegation.Design/methodology/approachWB allegation data is obtained from the US Occupational Safety and Health Administration and through manually collecting media-reported WB allegations. The authors use a difference-in-difference research design to examine auditor resignations around WB allegations. The test sample is compared against a propensity-score-matched (PSM) sample of control firms.FindingsAuditors are significantly less likely to resign from an engagement following a WB allegation. Auditors prefer to increase their fees and continue with the engagement rather than resign, even when faced with the heightened risks posed by WB allegations. These findings suggest that auditors value the ability to earn a consistent stream of increased revenue from their clients, in agreement with the risk-spreading theory of audit continuance literature.Originality/valueTo the best of the authors’ knowledge, this is the first study that examines auditor resignations following a WB allegation. These findings contribute to the existing WB and auditing literature and add to the auditor acceptance/continuance literature. The findings are meaningful to shareholders, managers, researchers and especially to standard setters who are tasked with ensuring that auditors provide assurances about the accuracy of financial statements.
Journal Article