Skip to main content
Log in

A Negotiation-Oriented Model of Auditor-Client Relationships

  • Published:
Group Decision and Negotiation Aims and scope Submit manuscript

Abstract

The increasing frequency and complexity of inter-organizational relationships suggests that inter-organizational negotiations should represent an area of increasing concern to management and academicians. Unfortunately, there is little theorizing about, nor study of, these negotiations. The few extant models are heavily influenced by models of individual negotiating styles that are then raised to the inter-organizational level with minimal change. The model developed here attempts to provide a framework for understanding the context of these inter-organizational negotiations by identifying and illuminating factors that influence the outcome of interactions in various long-term supplier relationships. Factors discussed include dynamic and stable environments, organizational cultures, role involvement, previous interactions between the individuals and organizations, and the unique characteristics of the decision-making processes that characterize the specific parties. As a framework for our presentation, we draw upon Kleinman and Palmon's (1999) theory of audit firm-client firm relationships, which is based on Kahn et al.'s (1964) Role Episode Model and Merton's (1966) Role Set Model. This paper incorporates Shakun's (1988) theory of evolutionary system design. The inclusion of the latter improves upon Kleinman and Palmon's work by first providing a better motive for the interaction between the parties, and second by shedding further light on the dynamics of the negotiation process.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Adams, J. S. (1963). “Toward an Understanding of Inequity”, Journal of Abnormal and Social Psychology 67(5), 422–436.

    Google Scholar 

  • Bates, H. L., R. W. Ingram and P. M. J. Reckers. (1982). “Auditor-Client Affiliation: The Impact on Materiality”, Journal of Accountancy 153(4), 60–68.

    Google Scholar 

  • Biddle, B. J. (1979). Role Theory: Expectations, Identities and Behaviors. New York: Academic Press.

    Google Scholar 

  • Biddle, B. J., and E. J. Thomas. (1966) Role Theory: Concepts and Research. New York: Wiley.

    Google Scholar 

  • Blake, R., and J. S. Mouton. (1964). The Managerial Grid. Houston, TX: Gulf.

    Google Scholar 

  • Fichman, M., and D. A. Leventhal. (1991). “Honeymoons and the Liability of Adolescence: A New Perspective on Duration Dependence in Social and Organizational Relationships”, Academy of Management Review 16(2), 442–468.

    Google Scholar 

  • Fogarty, T. J. (1996). “The Imagery and Reality of Peer Review in the U.S.: Insights From Institutional Theory”. Accounting, Organizations and Society 21(2/3), 243–267.

    Google Scholar 

  • Fombrun, C. J. (1986). “Structural Dynamics Within and Between Organizations”. Administrative Science Quarterly 31(3), 403–421.

    Google Scholar 

  • Heckathorn, D. D. (1990). “Collective Sanctions and Compliance Norms: A Formal Theory of Group-Mediate Social Control”. American Sociological Review 55(3), 366–384.

    Google Scholar 

  • Hooks, K. L. (1981). Values and Value Systems of Public Accountants Relating to Professional Success. Ph.D. Dissertation, Georgia State University.

  • Kahn, R., D. M. Wolfe, R. P. Quinn, J. D. Snoek, and R. A. Rosenthal. (1964). Organizational Stress: Studies in Role Conflict and Ambiguity New York: Wiley.

    Google Scholar 

  • Kleinman, G., and D. Palmon. (1999). Understanding Auditor-Client Relationships: A Multi-faceted Analysis. Princeton, N.J.: Rutgers Series in Accounting Research, Markus Weiner Publications Inc.

    Google Scholar 

  • Kleinman, G., D. Palmon, and A. Anandarajan. (1998). “Auditor Independence: A Review and Synthesis of the Literature”, Vol. 11. Research in Accounting Regulation.

  • Knapp, M. C. (1987). “An Empirical Study of Audit Committee Support for Auditors Involved in Technical Disputes with Client Management”. The Accounting Review 62(3), 578–588.

    Google Scholar 

  • Knouse, S. B., R. A. Giacalone. (1992). “Ethical Decision Making in Business: Behavioral Issues and Concerns”. Journal of Business Ethics 11, 369–377.

    Google Scholar 

  • Leifer, E. M. (1988). “Interaction Preludes to Role Setting: Exploratory Local Action”. American Sociological Review 53(6), 865–878.

    Google Scholar 

  • Merton, R. K. (1966). “Instability and Articulation in the Role Set. In: B. J. Biddle and J. B. Thomas (eds.). Role Theory: Concepts and Research (pp. 282–287). New York: Wiley.

    Google Scholar 

  • Moorhead, G., and R. W. Griffin. (1994). Organizational Behavior. New York: McGraw-Hill Inc.

    Google Scholar 

  • Murnighan, J. K., and M. H. Bazerman. (1990). “A Perspective on Negotiation Research in Accounting and Auditing”. The Accounting Review 65(3), 642–657.

    Google Scholar 

  • Nord, W. R., and E. M. Doherty. (1994). “Toward an Improved Framework for Conceptualizing the Conflict Process”. Research on Negotiations in Organizations 4, 173–240.

    Google Scholar 

  • Ring, P. S., and A. Van de Ven. (1994). “Developmental Processes of Cooperative Interorganizational Relationships”. Academy of Management Journal 19(1), 90–118.

    Google Scholar 

  • Rokeach, M. (1960). The Open and Closed Mind. New York: Basic Books.

    Google Scholar 

  • Rotter, J. B. (1966). “Generalized Expectancies for Internal versus External Control of Reinforcement”. Psychological Monographs 1, no. 609, 80.

    Google Scholar 

  • Shakun, M. F. (1988). Evolutionary Systems Design: Policy Making Under Complexity and Group Decision Support Systems. Oakland, CA: Holden-Day Inc.

    Google Scholar 

  • Simon, H. A. (1957). Administrative Behavior. New York: The Free Press.

    Google Scholar 

  • Singhapakdi, A. (1993). “Ethical Perceptions of Marketers: The Interaction Effects of Machiavellianism and Organizational Ethical Cultures”. Journal of Business Ethics 12, 407–418.

    Google Scholar 

  • Spencer, J. W. (1992). “Negotiating Role Definitions and the Working Consensus in Self-Work”. Sociological Inquiry 62(3), 291–307.

    Google Scholar 

  • Stevens, M. (1991). The Big Six. New York: Simon & Schuster Inc.

    Google Scholar 

  • Thomas, J. B., L. J. Snakster, and J. E. Mathieu. (1994). “Antecedents to Organizational Issue Interpretation: The Role of Single-Level, Cross-Level, and Context Cues”. Academy of Management Journal 37(5), 1252–1275.

    Google Scholar 

  • Thompson, J. D., (1967). Organizations in Action. New York: McGraw-Hill.

    Google Scholar 

  • Tjosvold, D., and M. Poon. (1998). “Using and Valuing Accounting Information: Joint Decision-Making Between Accountants and Retail Managers”. Group Decision and Negotiation 7(4), 327–345.

    Google Scholar 

  • Tsui, J. S. L., and F. A. Gul. (1996). “Auditors' Behavior in an Audit Conflict Situation: A Research Note on the Role of Locus of Control and Ethical Reasoning”. Accounting, Organization and Society 21(1), 41–51.

    Google Scholar 

  • Tuckman, B. W. (1965). “Developmental Sequence in Small Groups”. Psychological Bulletin 63(6), 384–399.

    Google Scholar 

  • Victor, B., and J. B. Cullen (1988). “The Organizational Bases of Ethical Work Climates”. Administrative Science Quarterly 33(1), 101–125.

    Google Scholar 

  • Weick, K. E. (1979). “Cognitive Processes in Organizations”. In: B. M. Staw (ed.). Research in Organizational Behavior vol. 1, 41–74, Greenwich, CT: JAI Press, Inc.

    Google Scholar 

  • Zakjac, E. J., and M. H. Bazerman. (1991). “Blind Spots in Industry and Competitor Analysis: Implications of Interfirm (Mis)Perceptions for Strategic Decisions”. Academy of Management Review 16(1), 37–56.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Rights and permissions

Reprints and permissions

About this article

Cite this article

Kleinman, G., Palmon, D. A Negotiation-Oriented Model of Auditor-Client Relationships. Group Decision and Negotiation 9, 17–45 (2000). https://doi.org/10.1023/A:1008785122946

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1008785122946

Navigation