Uncooperative clients can undermine audit quality, according to new study

There’s a troubling inconsistency in how auditors respond to difficult clients during financial audits, according to a new study. Researchers from the University of Florida Warrington College of Business found that while auditors, especially younger auditors, mentally flag uncooperative clients as higher risk, they surprisingly act with less scrutiny when faced with these challenging interactions.

In four complementary studies, Fisher School of Accounting Assistant Professors Michael Ricci and Dan Rimkus examined both auditor behavior and client strategies. Their findings reveal a significant gap between what auditors think and what they actually do when dealing with uncooperative clients, like those who respond slowly to requests, provide disorganized evidence, limit their availability or behave aggressively.

“We seem to be doing a nice job of training young auditors to be perceptive,” Ricci said. “Not only do they pick up on uncooperative behavior, but they sense that it’s a bit suspect. At the same time, our evidence suggests that young auditors are anxious about following up on their instincts.

“So, we could probably do a better job of equipping young auditors with the social skills needed to follow-up on those instincts.”

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