Das, Abhijit, and Phang, Soon-Yeow (2026) How do audit committee members' and audit partners' communication styles jointly influence client managers’ negotiation behavior? Accounting, Organizations and Society, 117. 101664.

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Abstract

Auditor-client negotiations over contentious accounting issues can shape reported financial outcomes, yet little is known about how communication dynamics between audit committee (AC) members and auditors influence client negotiation behavior. We conduct an experiment in which experienced financial executives, assuming the role of chief financial officer, negotiate a disputed inventory obsolescence allowance with a simulated audit partner in the presence of an AC member; the AC member's distributive communication style (offensive vs. defensive) and the audit partner's reflective empathy (high vs. low) are manipulated between participants. Drawing on relational framing theory in interpersonal communication, we predict and find that a distributive-offensive AC communication style leads clients to establish their reporting positions and concede less to the auditor's proposed adjustment, unless it is accompanied by high reflective empathy from the audit partner, which neutralizes this resistance. This pattern emerges in the client's initial negotiation position and persists through the final negotiated allowance. Our findings suggest that auditors can use empathetic communication as a strategic tool to defuse the competitive posture that an assertive governance signal may provoke. Overall, our results provide insights into how AC members' and auditors' communication styles jointly shape client negotiation behavior, highlighting the importance of communication strategies in achieving effective audit negotiation outcomes.

Item ID:	94300
Item Type:	Article (Research - C1)
ISSN:	1873-6289
Keywords:	Auditor-client negotiation; Audit committee; Distributive defensive; Distributive offensive; Reflective empathy
Copyright Information:	© 2026 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
Date Deposited:	14 Oct 2026 05:59
FoR Codes:	35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3501 Accounting, auditing and accountability > 350102 Auditing and accountability @ 100%
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