Persuasion in Auditing: A Review Through the Lens of the Communication-Persuasion Matrix

ABSTRACT

We provide a comprehensive review and synthesis of behavioral experimental literature that examines persuasion in auditing. We organize our review by applying the five Components of Persuasive Communication from the Communication-Persuasion Matrix. Our synthesis identifies two primary contexts in which persuasion attempts occur in the auditing setting: (1) auditors and clients engaging in or coping with others’ persuasive communications; (2) auditors coping with subordinates’ persuasion attempts in working papers. From our analysis, we identify a concentration of prior persuasion research on source, message, and receiver variables, and we develop 26 questions for future research to consider based on gaps we identify in the literature. Our literature review specifies and organizes key features of persuasion in auditing, enhances our understanding of how auditors and clients initiate and respond to persuasive communications, and discusses significant implications for both audit quality and financial reporting outcomes.

Keywords:

• Persuasion
• Auditing
• Judgment and decision-making
• Communication-Persuasion Matrix

Acknowledgements

We would like to thank Hervé Stolowy (the Editor), two anonymous reviewers, Davidson Gillette, and Daniel Street for their comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplemental Data and Research Materials

Supplemental data for this article can be accessed on the Taylor & Francis website https://doi.org/10.1080/09638180.2020.1863243

Figure A1. Publication trends of auditing-persuasion research

Table A1. Summary of auditing-persuasion articles

Notes

1 In our review, ‘client,’ ‘manager’ or ‘management’ represents client managers and other personnel responsible for preparing financial statements and maintaining internal controls over financial reporting. ‘Auditor’ or ‘auditors’ represents external auditors responsible for auditing financial statements and related internal controls.

2 We consider behavioral audit research to denote studies that examine judgment and decision-making behaviors in the auditing context. The underlying theories in this literature are primarily applied from cognitive and social psychology, as well as communications, and the research methodologies are primarily experimental.

3 We include working papers posted to the Social Science Research Network (SSRN) to identify emerging persuasion studies in auditing. Working papers posted to SSRN (https://www.ssrn.com/index.cfm/en/) were identified as of March 25, 2020 using the search term persuasion and selecting the network Accounting in the advanced search engine. Within that search, the term audit was then applied to filter the results.

4 For reader convenience, we include cross-references in Table 2, Panels A to E, between each component of the CPC (i.e., source, message, receiver, channel, and destination) for each article, so that it is apparent which articles are synthesized in each section.

5 In addition to the 15 journals included in Table 1, we also extended our search to 12 additional journals that did not yield any relevant studies to include in our synthesis: Accounting, Auditing & Accountability Journal, Critical Perspectives on Accounting, European Accounting Review, Journal of Accounting and Economics, Journal of Applied Psychology, Journal of Business Ethics, Journal of Business, Finance, & Accounting, Journal of Information Systems, Journal of Management Accounting Research, Journal of Personality and Social Psychology, Management Accounting Research, and Review of Accounting Studies.

6 This approach also identifies articles that simply cite another article with the term ‘persuasion’ in its title or publication. Thus, our process identifies articles relevant to our synthesis that do not include our search terms in the body of the article, but do reference other prominent, widely cited persuasion studies or persuasion theories (e.g., Chaiken, 1980, 1987; Petty & Cacioppo, 1986; Friestad & Wright, 1994; Rich et al., 1997).

7 We identified relevant articles based on their title and abstract. If the article's relevancy remained unclear, we read the introduction and used a keyword search for use of the stem ‘persua-‘ within the article. We excluded articles if they were clearly unrelated to persuasion (e.g., the only mention of ‘persuasion’ was in the citation of a different article), they did not use behavioral experimental methods, or they did not examine some aspect of the audit environment (e.g., articles related to managerial decision-making, tax, etc.).

8 Within our sample, 48 articles (49%) have been published or posted to SSRN since 2015.

9 In addition to these five Components of Persuasive Communication, McGuire's (1969, 1978) Communication-Persuasion Matrix includes common persuasion outcomes (i.e., attention, comprehension, yielding, retention, and action), from a sequential six-step information processing behavioral analysis, to evaluate and predict persuasion effectiveness. Rather than discuss the process and outcomes, for expositional clarity, we instead focus on common audit outcomes that are likely to result from the receiver's susceptibility to persuasion (e.g., changes in auditor judgments and decision-making). We also discuss persuasion theories beyond McGuire's matrix.

10 While McGuire (1969, 1978) presents his CPC as separate classes of independent variables, he acknowledges that these factors will interact with one another, and cautions against oversimplification when using his model to predict persuasion outcomes. For example, persuasion effectiveness of message variables will be influenced by source, receiver, channel and destination variables (McGuire, 1969, p. 174). We discuss interactive effects throughout our synthesis as they relate to both published studies and opportunities for future research.

11 While some studies examine the extent of auditor requests for information (e.g., Bennett & Hatfield, 2013) and the nature of managers’ responses to audit inquiry (e.g., Saiewitz & Kida, 2018), we did not identify any studies that directly examine strategic omission of information as a means of persuasion.

12 See Hurtt (2010) for a discussion of distinctions between trait and state skepticism.