PhD defence: Ellen H. Marthinsen Kulset

On Thursday 14 March 2013 Ellen Kulset will hold a trial lecture on a prescribed topic and defend her thesis for the PhD degree at NHH.

The topic of the thesis is auditor-client negotiations over accounting issues. The study investigates the relationship of each of four variables to the auditor's combined use of the contending and the conceding strategy in auditor-client negotiations over accounting issues.

These variables are the precision of accounting regulation, the audit partner's general level of experience, the client's accounting expertise, and the auditor-client relationship.

Based on a survey of 79 auditor-client negotiations conducted in one of the big-four audit firms, Kulset finds that as hypothesized the precision of accounting regulation is positively related to the auditor's choice of negotiation strategy (i.e. the more precisely regulated the accounting issue is, the more contending is the auditor's overall negotiation strategy) and that the client's accounting expertise and the quality of the auditor-client relationship are negatively related to the auditor's combined use of the contending and the conceding negotiation strategy (i.e. the higher the client's accounting expertise, the less contending is the auditor's overall negotiation strategy and the more positive the auditor-client relationship, the less contending is the auditor's overall negotiation strategy).

The partner's experience is found to be positively related to the auditor's combined use of the contending and the conceding negotiation strategy (i.e. the more experience the partner has, the more contending is the auditor's overall negotiation strategy).

Further findings indicate that the precision of accounting regulation is by far the most important independent variable when trying to predict auditor's negotiation behavior.

The study also finds that the most important variable in predicting the accounting outcome in auditor-client negotiations over accounting issues is the precision of accounting regulation, but the auditor's choice of negotiation strategy and the audit partner's general level of experience also seem to have effects, as does audit risk as a control variable.