Auditor-Client Relationships: An Analysis of Expectation Gaps Between Members of the Board of Directors and Auditors Regarding Attributes Influencing Clients’ Auditor Choice Decisions

Abstract

This paper reports the results of a survey of board members who participate in auditor appointments and audit firm partners and (senior) managers on attributes influencing clients’ auditor choice decisions. We identify several “expectation gaps” between the importance that board members assign to attributes and the importance that auditors expect board members to assign to the same attributes. The results indicate that board members deem low audit fees, as well as a good relationship with the audit partner to be less important than audit partners and managers expect. We find the opposite for attributes related to audit quality, such as technical competence and industry expertise, as well as professional skepticism and independence of mind, and business know-how of the audit firm, which board members assess as more important than audit partners and managers expect. The findings have important implications for auditors in audit tenders.