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Auditors' identity, client accountability pressure and auditors' conciliatory behavior: evidence of Iran.


When auditors have a dispute whit client management regarding a contentious accounting issue, they face a number of competing obligations-their personal obligations, their firm, client management, the board of directors, the profession, regulators, and the public interest[2, 5]. Regardless of these competing obligations, they are expected to ensure that the public interest is paramount and to "stand tough" [6]. Yet many critics claim an underlying cause of many recent audit failures is auditors' inability to stand tough [14].

More awareness of the characteristics of relatively high-performance auditors would provide several benefits. While technical accounting knowledge and problem-solving ability are essential, an auditor's behavioral skills may, at the margin, differentiate levels of job performance [26]. Such skills may include the effectiveness of client interaction in addition to an auditor's professional attitudes and behaviors, including contributions made as a member of an audit team. If the pertinent behavioral skills can be learned, auditors would benefit from training to enhance their performance, e.g., role playing in simulated client situations and reinforcement of productive interaction behaviors during brainstorming sessions. Auditors develop and maintain client relationships to help ensure that clients do not become dissatisfied and seek a new auditor. Further, auditors provide objective, high-quality audits with appropriate evaluations of the firm, including its internal controls, while simultaneously resolving issues about which clients have preferred positions.

The use of subjective judgment is pervasive in the preparation of financial statements, and

Disputes often arise between clients and auditors over accounting issues where GAAP is unclear [23, 24] these disputes

Entail negotiations between clients and auditors, and financial statements have been characterized as a product of auditor-client negotiations [3]. The outcomes of these negotiations have significant implications on audit quality and financial statement quality, and it is important to understand determinants that influence negotiation judgments made during auditor-client negotiations.

Auditors and client managers bring to bear on auditor-client negotiations their own particular characteristics that influence judgments made during these negotiations [31]. Auditors who enter into negotiations over audit adjustments with these different types of clients also vary in terms of their negotiation experience. Currently, the literature does not inform us on how these factors interact.

This study contributes to the small stream of audit litterateur that argues that social and individual factors, in addition to economic incentives and cognitive biases, play an important role in auditors' conciliatory behavior [40]. The premise of this study is that auditors are both group members and representatives who are accountable to and monitored by their peer groups as well as a wide range of constituents and third parties. Therefore their willingness to be conciliatory is affected by the level of accountability-cross pressures and commitment to the groups they represent.

Literature analysis and hypotheses: Accountability Theory and Social Identity Theory:

Accountability has long been of interest to scholars and theorists. From Aristotle to philosophers such as Rawls there has been much interest and debate regarding what motivates individuals to responsible and accountable. Accountability is being answerable to audiences for prescribed standards that are relevant to fulfilling obligations, duties, expectations, and other charges [12, 37]. It represents a critical rule and norm enforcement mechanism-the social psychological link between individual decision makers on one hand and social systems on the other [37]. That is, it is an implicit or explicit constraint on our behavior.

Although accountability helps to explain auditor behavior, no explanation of auditor behavior is complete without consideration of how auditors' identity affects their response to accountability pressure. As Schlenker (1992) argues, people only feel accountability pressure if they feel responsible for the event. He also argues that people's identity is a key to understanding how people interpret their responsibility when they are accountable. Social identity has long been of interest to scholars in many disciplines such as psychology, sociology, and organizational behavior. In social psychology, the premise of social identity theory originates from Tajfel's research into inter-group relations. Tajfel and his colleagues [16, 19]. Developed a series of "minimal group" experiments whereby the subjects were sorted by predetermined categories by experimenter on a random basis. If an individual identifies strongly with a particular group or organization, then he or she is more likely to interpret an event and or their role in the event in a manner that reflects the values of that group [4, 7, 12]. Social psychological and audit studies have demonstrated that identification with group created in the laboratory motivates individuals to act on behalf of the group, to favor other group members, and to protect group interests [12, 28, 30]. Audit the recognize the importance of auditors' identity in auditor judgment and behavior; however, most empirical research, to date, has focused on the role of professional and organizational identity in turnover intentions, commitment to the organization, and following rules of professional conduct [39].

Two recent audit studies provide support for the proposition that auditors' identity influences auditors' conciliatory behavior [19, 20]. in their study of auditor-client disputes, find that high identification with a particular client increases the likelihood to accede to client management. Patel et al., (2002) explore another dimension of auditors' identity, national identity, and find auditors' national identity influences the likelihood to accede to client management. However, both studies did not provide specific detail of the disputed issue in dispute; thus, it is not clear if the effect would be as strong.

Conciliatory Behavior:

In my theoretical model, conciliatory behavior is considered in the context of auditor-client dispute over a proposed audit adjustment that is material to the financial statements. Conciliatory behavior is auditors' willingness to be helpful and cooperative with their negotiation partner, client management [33]. Rather than focusing on one single outcome as being indicative of conciliatory, we have conceptualized conciliatory behavior as a multi-dimensional construct. The dimensions are: proposed audit adjustment, required note disclosure and the likelihood of accepting client management's proposed accounting treatment. Each dimension will be discussed in turn.

Proposed Audit Adjustment:

Senior managers and partners typically negotiate with clients over proposed audit adjustment [38]. In a typical audit situation, the audit team has identified the material difference and informs the partner or senior manager. Since the audit team and client management did not agree on the disputed item, the partner or senior manager meets with client management to come to some sort of agreement as to how the item should be recorded. The senior managers or partners will review the audit team's rationale and will either propose to client management the teams' amount or an alternative amount. If the partners' initial recommendation is below the audit team's recommended amount it represents a conciliatory move.

Proposed Footnote disclosure:

When auditors evaluate the reasonableness of their client's accounting treatments, they often must assess both the appropriateness of the amount recorded on the financial statement (the proposed audit adjustment) as well how the transaction is disclosed in the footnotes to the financial statements. Many researchers speculate that the disclosure decisions give the auditors an opportunity to make a trade off [26]. In other words, auditors can offer to the client "I will accept that you do not record the amount in the financial statements if you agree to disclose important details of the transaction in footnotes". Brown and Wrigth (2008:92) argue that this type of rationale reflects an integrative or win-win strategy. In essence, the auditor is using the proposed disclosure of the contentious accounting issue as a "bridge" that satisfies the preference of both the auditor and the client.

Likelihood to Accept Management's Proposed Accounting:

Once auditors assess what they consider to be the most appropriate measurement and disclosure for a particular accounting issue, they must consider whether the client's proposed treatment: (1) applies GAAP principles, (2) Provides sufficient information about the transaction, and (3) is clear and understandable [14]. If it meets those criteria, regardless whether it is the auditors' preferred treatment, then the auditor will accept client management's preferred accounting treatment [12].

However, auditors' interpretation of whether or not it meets the criteria is not purely objective and based upon technical interpretation of GAAP. As past research demonstrates, auditors are influenced by client preferences and incentives thus leading to biased justification [18].

Model and Hypotheses Development:

The model (Figure 1) starts with a series of hypotheses that assume accountability cross-pressures and auditor experience have a direct impact on conciliatory behavior. We also expect that auditor identity (professional identification and client identification) and auditor experience will moderate the effect accountability cross-pressures.

When accountability sources have conflicting preferences this creates accountability cross-pressures [18, 37]. In Addition to the conflicting preferences, accountability cross-pressure can vary according to the difference in sources' preferences, the sources, ability to question, and the sources ability to sanction the decision-maker [29]. Negotiation research demonstrates that when accountability cross-pressures are low, that is, when one accountability source is dominant or accountability sources share similar preferences, negotiators are likely to use the acceptability heuristic and approach the negotiations accordingly [32]. When auditors and client management have a dispute over a particular accounting issue, client conformity pressure is high. The client management is attempting to pressure the auditor to accept its proposed accounting treatment and management has the ability to withdraw from the relationship thus causing the auditor economic loss [4]. This motivates the auditor to agree with client management's preferred accounting treatment and be conciliatory. Therefore, in the absence of other accountability sources, provided the client's preference does not contravene GAAP, the likelihood of auditors using the acceptability heuristic is high. Indeed, past auditor research supports this assumption [12].

In summary, the presence of parties, who can question and sanction auditors, will constrain auditors' likelihood of using the acceptability heuristic. As a result, auditors will use pre-emptive self-criticism and will be more questioning of management's motives and rationale. This leads to my first hypotheses:

H1: As accountability cross-pressures increase, auditors are less likely to be conciliatory.

The general negotiation literature provides evidence that as experience with the "task" of negotiations increases, negotiators offer fewer concessions and make offers low in value to the other party [19]. Further, recent audit research finds that as either general or negotiation experience increases, auditors are less conciliatory when client management is pushing an aggressive accounting treatment [8, 36]. Taken together this suggests that more experienced auditors are less conciliatory than less experienced auditors.

H2: As auditors' experience increases, auditors will be less conciliatory.

While experience helps auditors develop their abilities as negotiators, it also impacts their interpretation of accountability pressure. For instance, Brown's (1999) study demonstrates advertising practitioners use their knowledge and experience to infer what is expected of them from their accountability sources. Recent research suggests that auditors' experience mitigates the effect of client conformity pressure [39]. It therefore follows when accountability cross-pressures are high, that the more experienced auditors will be less conciliatory than the less experienced auditors. Therefore, we hypothesize the following:

H3: As accountability cross-pressures increase, auditors with more experience will be less conciliatory than auditors with less experience.

Although the consequences surrounding negotiation decisions make accountability salient, its effect is not equal for all auditors [14]. Relevant to this theoretical model is negotiation research that demonstrates that social identity is an important moderator of accountability pressures [27]. Although some theorists place a heavy emphasis on differentiating between multiple identities, research shows that in many contexts, professionals tend not to make clear dissentions between their identities [43].

Therefore, in many situations, multiple bases of identification are salient and used simultaneously [42]. For auditors, two foci of identification that are usually salient are the "professional auditor" versus "client service provider" [3, 35]. However, the two identities share similar characteristics and, therefore, are not mutually exclusive. Auditors who identify highly with their profession feel that their profession does important work that society values. This sense of pride motivates auditors to put the public interest above other competing obligation [39]. Past auditor research provides support for the relationship between professional identification and the motivation to follow rules of professional conduct. This provides some preliminary support for auditors with high professional identification putting the public interest first [22]. Particularly relevant to this theoretical model is recent research that finds a negative relationship between professional identification and conciliatory behavior [2].

A high professional identification implies auditors have internalized the values of their profession and use them as a guide [19]. Therefore, they are less affected by accountability cross-pressures. A low professional identification implies that auditors do not place as much emphasis upon value of independence. Therefore, auditors will behave more in line with the economic and motivated-reasoning models (that is, they either consciously or unconsciously consider the costs of not agreeing with the client) [31]. Stated as hypotheses:

H4: There will be a stronger relationship between accountability cross-pressures and auditors' conciliatory behavior for auditors with low professional identification than auditor with high professional identification.

Identification with one's clients, in particular, taking care of the client and addressing their needs, is another important focus of auditors' identification [1,2]. Negotiators who identify with their negotiation partner are more open to reciprocity. Therefore, high client identification implies that auditors are more conciliatory. In other words, they are likely to make smaller audit adjustments in anticipation that down the road the client will reciprocate [12,37]. In addition, negotiators who identify with their negotiation partner are less likely to interpret contentious pressure tactics as threatening [26]. Therefore, auditors would not be as sensitive to (or more accepting of) client management's conformity pressure. It follows that high client identification will amplify the effect of client's conformity pressure and, therefore, increase the likelihood of conciliatory behavior. In contrast, low client identification means auditors will focus on the preferences of other accountability sources and be more skeptical of client management's reasons. Therefore, low client identification will amplify the effect of other accountability sources' preferences and therefore decrease the likelihood of conciliatory behavior.

Hypothesis on the interactive effect accountability cross-pressures and client identification on conciliatory behavior is:

H5: As accountability pressure increases; auditors with high client identification will be more conciliatory than auditors with low client identification.



Statistical population in this study, auditors working auditing firms Iranian association of certified public accountant. The attendees completed the case scenario for data-gathering in during 2012. Auditors at this level are regularly involved in the resolution of disputes relating to proposed audit adjustment [30]. Therefore, in addition to the requisite technical knowledge (which is assumed that they all have given that there are no complex GAAP rules associated with the treatment of management estimates) they would have the tacit knowledge necessary to complete this task [42].

A negotiation scenario was created related to an estimate for a non-routine warranty provision was selected due to the multiple decisions involved when ascertaining whether or not it is reflected appropriately in the financial statements. 130 auditors participated in the study. Among them, 110 participants have completed the scenario correctly were included in the analysis.

Independent Variable Measures:

Participants were randomly assigned to one of 3 versions of an audit negotiation scenario, where the description of the client company is altered to reflect three levels of accountability cross-pressures- high, medium, and low. The manipulation of the accountability cross-pressures is described in more detail below. The variables, professional identification, client identification, and experience are measured variables.

The primary independent variables were auditors' identity (with the focus on two dimension--professional identification and client identification), accountability cross-pressures, and auditors' experience. A five-item scale measured auditors' professional identification and a three-item scale measured auditors' client identification. Both scales are adapted from the Mael and Ashforth's (1992) organizational identification scale, which has been validated and used extensively in organization behavior research [9]. The auditors' professional identification scale has been validated and used in audit research [5].

The accountability cross-pressures variable is manipulated at three levels--high, medium, and low. In the high accountability cross-pressures condition, the client company was described as a public company that is traded on the Tehran Stock Exchange. Given that are many audiences who could potentially review auditors' decisions, the auditors will be concerned about the preferences of the various audiences. In the moderate and low condition, the company was a private company in the moderate condition; the company had an audit committee, whereas, in the low condition, there was no audit committee.

In order to perform analysis on the effect of auditors' experience, participants also indicated their years of public practice audit experience.

Dependent Variable Measures:

The focus of study is auditors' conciliatory behavior. Three dependent variables were used to gain insight into auditors' conciliatory behavior--(1) recommended adjustment, (2) required not disclosure, and (3) likelihood to accept client management's preference. Using multiple dependent variables provides a fuller and more nuanced picture of some key decisions and interpretations auditors make that influence the likelihood that they would be conciliatory towards client-management and accept the proposed accounting treatment of the warranty provision. It is a common approach in negotiation research to use multiple dependent variables to assess the outcomes [6, 34].

The first dependent variable was the recommended audit adjustment. This variable was measured by asking the participants to indicate the amount they would recommend to be booked. The participants complete either yes or no to the question: "Taking into account your proposed adjustment, would you require that company disclose the range of potential warranty claim in the financial statement?" Participants also indicated on an eleven-point scale (0 to 10) the likelihood of accepting management's proposed treatment. In many auditors propose adjustment, which in their professional opinion, are the most appropriate treatment; however, for various reasons (i.e. materiality, degree of uncertainty), they may be willing to accept management's proposed treatment and post the adjustment to the summary of audit differences. Therefore, this variable captured the auditors' willingness to concede on their initial recommended adjustment and note disclosure.


Data Analysis and Tests of Hypotheses:

In order to analysis data and test my hypotheses, I used a combination of univariate and multivariate analyses. Since my theory-driven model comprises of more than two predictor variables and the variables are at the individual level and contextual level, an appropriate technique to test the models presented in Figure 1 is hierarchical regression (Petrocelli, 2003). Table 2 presents the correlations among the independent and dependent variables for the model depicted in Figure 1.

There is a significant negative correlation between recommended adjustment and the likelihood to accept management's proposed accounting treatment (r = -0.26, p < 0.05). In addition, the required footnote disclosure is negatively associated with the likelihood of accepting management's proposed accounting treatment (r = -0.24, p [less than or equal to] 0.05). Therefore, it appears auditors who propose higher audit adjustments are less likely to ultimately concede to client management. This supports the assumption of the theoretical model that auditors who propose higher audit adjustments are signaling that are conciliatory. Similarly, Auditors who propose additional footnote disclosure are less likely to concede to client management. This also supports the assumption that auditors who require footnote disclosure are signaling that they are not being conciliatory towards client management.

Although both proposed audit adjustment and note disclosure are correlated with the likelihood to accept, surprisingly the two variables are not correlated with each. Brown and Wright (2008) suggest auditors may use note disclosure as a bridging mechanism. In other word, it allows them to accept lower audit adjustments provided additional disclosure is made about the transaction. This suggests that the two variables are either not related or the relationship between the two is more complicated.

The 3 presents a summary of the univariate analysis of the dependent and independent variables for the Model of Accountability Cross-Pressures, Auditor Experience and Identity on Auditors' Conciliatory Behavior (Figure 1).

Overall, the average proposed audit adjustment of 394 million rails is lower than the 650 million rails proposed by the audit team. Based upon a breakdown of the participants by the various dependent variables, there were no significant differences among the groups. 65percent of the participants did not concede to client management. Of those, 55.5 percent participants proposed the amount recommended by the audit team and 28 percent chose an amount higher than the audit team. 4.5 percent regardless of the audit adjustment and 12 percent chose an amount between 150 million rails and 422 million rails. T-tests revealed that there were significant differences between the professional and client identification groups for the likelihood to accept; however, no other significant differences were noted for the accountability cross-pressure groups of the experience groups.

Tables 5 summarize the results of the hierarchical regression for the three dependent variables for the first Model (Figure 1). Hierarchical Logistic Regression was used for the dichotomous dependent variable, required note disclosure and Hierarchical Multiple Regression was used for two continuous dependent variables, Proposed Audit Adjustment and Likelihood to Accept Management's Preferred Accounting Treatment.

The goal of hierarchical regression is to determine the degree to which variables entered into the steps later in the analysis account for the variance in the criterion over that which is accounted for by variables entered in earlier.

Based upon the theoretical model presented in Figure 1, we used the following steps to enter the variables:

Step1: Experience

Step2: Accountability Cross Pressures (ACP), Professional Identity (PI), and Client Identity (CI)

Step3: Accountability Cross-Pressures (ACP) x Experience

Step4: Accountability Cross-Pressure (ACP) x Professional Identity (PI), Accountability Cross-Pressures (ACP) x Client Identity (CI)

Results of the hierarchical regression show that none of the models are significant. In addition, none of the changes in F were significant. However, Experience had a significant negative effect on step two both note disclosure and likelihood to accept and Accountability cross-pressures had a significant negative effect in step four of the note disclosure model.

Table 6 summarizes the significant results of the Logistical Regression Model for Not Disclosure and General Linear Regression Model for Likelihood to Accept. No significant main or interaction results were found for Proposed Not Disclosure.

Panel B shows that main effect for both experience and accountability cross pressures is significant. The interaction is marginally significant (Wald = 3.112, p = 0.201). We also ran the using General Linear Regression and found the model was significant and we had similar but stronger results for the interaction.

The first hypothesis (H1) proposed that as accountability cross-pressure increase auditors are less likely to be conciliatory. The correlation matrix (Table 2) shows that although cross-pressures are positively correlated with all three dependent variables, it is not significant. One-way ANOVASs of the high, moderate, and low accountability conditions for the three dependent variables revealed that there were no significant differences. Therefore, Hypothesis H1 is not supported. A closer examination of the groups (Panel A of Table 4) reveals that the low accountability cross-pressures group (private company) is consistent with the theoretical prediction-they proposed the lowest audit adjustment (mean = 325 million rails) and was the most likely to accept the client treatment (mean = 2.67). Further, of the three group, the high group (public company) was least likely to accept client management's proposed accounting treatment (mean = 2.18). However, the moderate group (private company with an audit an audit committee) proposed the highest audit adjustment(mean = 445 million rails). Further, a higher proportion of the moderate group (0.56) would require note disclosure than the high group (0.41) and the low group (0.44). Thus, it appears that the moderate group is more sensitive to the accountability cross-pressures than the other two groups.

Given the negative relationship between audit experience and note disclosure and the lack of significance with the other two dependent variables, Hypothesis 2 is not supported. The negative significant correlation between experience and note disclosure (r = -0.27, p < 0.01) suggests that as experience increases auditors are less likely to require note disclosure (they are more conciliatory); therefore, the relationship is in the opposite direction of what was predicted. A closer examination of adjustment and likelihood to accept (Panel B of Table 4), recommended a higher average audit adjustment of 485 million rail and were more likely to accept the client's recommended accounting treatment (mean = 2.61) compared to the low group. However, t-tests did not show any significant differences between the groups.

In order to test the effects of the two variables, accountability cross-pressures and auditor experience, and compare the means of the two groups we entered the variables simultaneously into: the General Linear Model for the two dependent variables, proposed audit adjustment the likelihood to accept client's preferred accounting treatment and Logistical Regression for the dependent variable, required note disclosure. Based upon the result of two significant interactions, Hypothesis 3 is supported.

The hierarchical regression in Table 6 shows that there were no significant interactions for any of the independent variables; therefore, hypothesis H4 is not supported.

The hierarchical regression in the Table 6 shows that were no significant interactions for any of the independent variables; therefore, hypothesis H5 is not supported.


This study challenges the assumptions of current rational and individualist view of auditor-client negations. Putnam (1994) claims negotiators aim for three types of goals--instrumental, relational, and identity management. This study provides evidence that this claim has merit. The study demonstrates that accountability cross-pressure and experience interact and affect conciliatory behavior. To adding social identity and accountability to the theoretical mix of auditor negotiation theory, the study considers the role of experience and demonstrates that auditors' level of experience influences the interpretation of accountability cross-pressures. However, it was somewhat surprising that more experienced auditors were more likely to be conciliatory than the auditors with less experience. One striking finding of in this study is that both high client identification and high professional identification heightened auditors' sensitivity to client conformity pressure. Since there appears to be a negative relationship between client conformity pressure and auditors' conciliatory behavior, it suggest that identifying with clients as a group does not preclude being able to "stand tough". A potential-reason may be Packer's (2008) concept of "normative conflict". Since auditors' identity is multi-faceted, other alternative standard, from other identification may guide behavior thus causing normative conflict. Packer (2008) argues that it is not identification alone that leads to conformity (or in this case conciliatory behavior). He argues strong identifiers will ask: "what is the best I can do for the group or the relationship in this situation?" If perceptions of normative conflict are high, then the strong identifier will not concede to the client's request because in the end it is not seen to be in the best interests of the relationship. It may also be that the normative conflict leads the auditors to act more individualistic. This study found HIGH Client identification was negatively related to client conformity pressure and that Gendron et al. (2006) study found higher client identification was positively associated with their commitment to the auditor independence, these finding suggest theorists should reconsider the impact of client identification.

Future Research:

This research poses a few questions that warrant future research. Further follow-up on the role of client identification in auditor-client disputes is one area that additional research could shed light on the somewhat surprising results. Qualitative research that delves into how auditor deal with the normative conflict created between their client identification and other aspects of their identity may provide further insight into why high client identification does not necessarily translate into conciliatory into conciliatory signals to client management. It may also provide more insight into what are the underlying motivations of auditors' self-interest. Another important avenue for future work is determining whether accountability and social identity interact in shaping auditors conciliatory behavior. While limited support was found for the interaction in this study, it is possible that accountability cross-pressure in this study was too weak or not significantly different among the three condition. Further follow-up on the impact of auditors' perceptions of client management conformity pressure would perhaps provide the necessary insight to help untangle the relationships.

Article history:

Received 11 September 2013

Received in revised form 21 November 2013

Accepted 25 November 2013

Available online 29 December 2013


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(1) Farshid Kheirollahi, (2) Ali Maleky Doborjy, (3) Mahsa Mohammadpoor and (4) Farzad Gavshani

(1) Ph.D. of Accounting, Accounting Assistant Professor, Razi University, Kermanshah, Iran.

(2) M.Sc. student of accounting, Science and Research Branch of Kermanshah Islamic Azad University, Kermanshah, Iran.

(3) M.A Student of Accounting from Hamadan Islamic Azad University, Iran

(4) M.A Student of Accounting from Kermanshah Islamic Azad University, Iran

Corresponding Author: Farshid Kheirollahi, Ph.D. of Accounting, Accounting Assistant Professor, Razi University, Kermanshah, Iran

Table 1: Participant Demographics

Variables                         Number    Percent

Gander          Male              78        70.90
                Female            32        29.10
Graduate        Bachelor          72        65.5
                M.A               38        34.5
Current         Auditor           22        20
  Position      Senior Auditor    28        25.5
                Audit Partner     30        34.5
                Audit Manager     30        34.5
Years Audit     < 5 years         50        45.5
  Experience    6-8 years         24        21.8
                > 10 years        36        32.7

Table 2: Correlation Matrix: Independent and
Dependent Variables

                      1       2       3       4       5      6
1. Proposed
2. Proposed           -0.06
3. Likelihood         -0.24   -0.26
  to Accept
4. Accountability     0.04    0.08    0.05
5. Professional       0.15    -0.09   -0.06   -0.16
6. Client             -0.05   0.08    -0.12   -0.15   0.09
7. Total Years'       0.04    -0.27   -0.07   0.35    0.16   -0.06

Table 4: Univariate Analysis on Independent and Dependent
Variables (Mean, Standard Deviation, n)


Proposed         Required Note    Likelihood
  Adjustment       Disclosure       to Accept

Panel A: Accountability
                           325000000        15             2.67
                           198000000        0.44           3.42
                           30               33             35
                           445000000        19             2.41
                           380000000        0.56           2.53
                           30               33             33
                           410000000        11             2.18
                           192000000        0.41           2.45
                           30               31             30

Panel B: Total Years
Audit Experience

                           485000000        13             2.61
                           220000000        0.30           3.21
                           44               48             47
                           455000000        38             2.56
                           228000000        0.67           3.33
                           61               66             66

Panel C: Professional

                           495000000        28             2.58
                           350000000        0.42           2.7
                           65               69             69
                           388000000        19             2.88
                           189000000        0.55           2.6
                           34               39             37

Panel D: Client

                           436000000        24             2.5
                           205000000        0.50           2.9
                           45               47             47
                           442000000        30             2.83
                           371000000        0.46           3.54
                           57               61             61
                           108              108            103

Table 5: Hierarchical Regression Results for Dependent
Variables-Proposed Audit Adjustment, Not Disclosure, and
Likelihood to Accept

Independent Variable    Step 1    Step 2    Step3     Step 4

Panel A: Dependent Variable-Proposed Audit Adjustment

Experience              0.038     0.021     0.042     -0.067
ACP                               0.069     0.078     0.341
PI                                0.132     0.129     0.312
CI                                -0.054    -0.054    -0.310
ACP x PI                                    0.016     0.081
ACP x PI                                              -0.788
ACP x CI                                              0.467
Change [R.sup.2]        0.002     0.036     0.000     0.041
Change F                0.121     1.044     0.001     1.562
Adj. [R.sup.2]          -0.012    -0.006    -0.011    0.009
Overall [R.sup.2]       0.002     0.299     0.041     0.053

Panel B: Dependent Variable-Note Disclosure

Experience              -0.066    -0.046    -0.073    -0.144
ACP                               -0.389    -3.155    -1.989
PI                                -0.055    -0.223    -0.038
CI                                0.069     -0.078    0.055
ACP x Experience                            0.055     -0.059
ACP x PI                                              0.067
ACP x CI                                              0.059

Panel C: Dependent Variable-Likelihood to Accept

Experience              -0.078    -0.086    -0.299    -0.287
ACP                               0.131     -0.166    -0.78
PI                                0.081     0.011     0.022
CI                                0.231     0.077     0.148
ACP x Experience                            0.389     0.355
ACP x PI                                              -0.057
ACP x CI                                              -0.059
Change [R.sup.2]        0.003     0.0033    0.021     0.003
Change F                0/199     0.766     1.205     0.032
Adj.[R.sup.2]           -0.006    -0.016    -0.006    -0.030
Overall [R.sup.2]       0.005     0.035     0.033     0.067

Table 6: The effects of Years Audit Experience and Relative
Accountability Cross-pressures on conciliatory Behavior

Panel A: Logistic Regression

Tests of Between-Subjects Effects-Required Not Disclosure

                                               (B) = 95%

Source                             B         S.E.     Wald      P

1.Audit Experience                 -0.178    0.066    5.433     0.033
2.Accountability cross-pressure    -2.126    0.826    5.132     0.056
3.Interaction between1 and 2       0.060     0.044    3.112     0.201
Constant                           5.088     2.101    -6.988    0.079
Corrected Total

                                            (B) = 95%

Source                             EXP (B)    Lower    Upper

1.Audit Experience                 0.977      0/825    0.998
2.Accountability cross-pressure    0.366      0.067    0.989
3.Interaction between1 and 2       1.002      0.999    1.656
Constant                           7.88
Corrected Total

Panel B: General Linear Model

Tests of Between-Subjects Effects-Likelihood of Accepting
Managements Preferred Accounting Treatment

Source                   Type III    df     Mean       F         P
                         sum of             Square
Corrected Model          59.831      2      18.252     3.566     0.088
Intercept                37.788      1      109.112    16.173    0.000
1.Audit Experience       22.609      2      34.351     4.455     0.044
2.Accountability         5.113       1      7.887      1.121     0.344
3.Interaction between    37.099      1      24.706     4.032     0.076
  1 and 2
Error                    691.669     103
Total                    1356.000    110
Corrected Total          577.344     110

Parameter Estimates

Parameter            B        Std.    t        p       Lower    Upper

Intercept            5.201    1.112   3.998    0.000   2.455    7.233
1.Low Experience     -2.899   1.476   -2.133   0.025   -7.201   -0.376
2.High Experience    0
3.Accountability     -1.115   0.655   0.655    0.040   -2.122   -0.044
Interaction          1.776    0.671   0.671    0.050   -0.02    2.666
  between 1 and 3
Interaction          0
  between 2 and 3
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Author:Kheirollahi, Farshid; Doborjy, Ali Maleky; Mohammadpoor, Mahsa; Gavshani, Farzad
Publication:Advances in Environmental Biology
Article Type:Report
Geographic Code:7IRAN
Date:Nov 1, 2013
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