Client Social Status and Cooperation with Audit Requests

Abstract

ABSTRACT Auditors collect evidence from clients that vary in social status. I investigate how these status differences interact with the costliness of auditor requests, thereby influencing client cooperation during evidence collection. I develop theory predicting that higher-status clients’ cooperation decisions will be more sensitive to differences in the costliness of requests than lower-status clients’ decisions. I test this theory across two experiments using multiple methods, leveraging the complementary strengths of each method. Experiment 1 is a more abstract experiment in the tradition of experimental economics, and Experiment 2 is a more contextualized experiment using participants with prior experience interacting with auditors. Results from both experiments support the theorized interaction between the costliness of audit requests and client social status. This conclusion carries implications for practitioners in assessing strategic tactics that will efficiently and effectively increase client cooperation. Data Availability: Contact the author. JEL Classifications: C91; D70; M41; M42.