Effective Factors on Client Non-acceptance Decision by Auditing Firms

Document Type : Research Paper

Authors

1 Assistant Professor, Department of Accounting, Faculty of Financial Sciences, Kharazmi University, Tehran, Irann

2 Assistant Professor, Department of Accounting, Faculty of Management and Accounting, Farabi Campus, University of Tehran, Qom. Iran

3 PhD student, Department of Accounting, Faculty of Management and Accounting, Farabi Campus, University of Tehran, Qom, Iran

Abstract

High competition in the auditing profession can encourage auditing firms to find new clients. However, the reputation of the auditing firm is important in terms of reliability, and they are generally reluctant to accept clients with management misconduct or misleading reporting. Therefore, this research uses scientific sources to extract the most important general categories and components affecting client non-acceptance decision. Accordingly, a semi-structured interview with 16 partners and technical managers of auditing firms is designed and conducted. The categories and components affecting the non-acceptance decision are identified through coding and content analysis of the interviews. Then a questionnaire is designed and data (234 completed questionnaires) is collected based on it. The results show that the five general categories including company financial information, notoriety and discredit of the client, inability to comply with the ethical requirements of the institution, inability to perform audit work and the nature of the client's operations are the most important factors influencing the non-acceptance decision. The results also show that in some cases, the categories affecting client non-acceptance decision in Iran may be different from the categories highlighted in international texts.

Keywords

References

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Empirical Research in Accounting
Volume 11, Issue 4 - Serial Number 42
December 2021
Pages 151-168

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History

  • Receive Date: 29 May 2021
  • Revise Date: 10 September 2021
  • Accept Date: 17 September 2021

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