ABSTRACT: Critics allege that audit committees often fail to mitigate management pressure on auditors when disputes arise during an audit. The objective of this study is to investigate factors that may affect the likelihood that audit committees will support auditors, rather than management, in audit disputes. A repeated measures experiment was conducted using 179 audit committee members as subjects. Analysis of variance results show that backgrounds of audit committee members may be predictive of their willingness to support auditors involved in disputes with client management. Also, two contextual variables seem important--whether the relevant professional standards are objective and the relative financial condition of the audited firm.

[Critics allege that audit committees often fail to mitigate management pressure on auditors when disputes arise during an audit. The objective of this study is to investigate factors that may affect the likelihood that audit committees will support auditors, rather than management, in audit disputes. A repeated measures experiment was conducted using 179 audit committee members as subjects. Analysis of variance results show that backgrounds of audit committee members may be predictive of their willingness to support auditors involved in disputes with client management. Also, two contextual variables seem important-whether the relevant professional standards are objective and the relative financial condition of the audited firm.]

[The objective of this study is to examine how certain contextual factors in auditor-client conflicts affect the perceived ability of auditors to resist client pressure. A review of the literature resulted in the identification of four factors hypothesized to affect sophisticated financial statement users' perceptions of audit conflict outcomes: nature of conflict issue, client's financial condition, provision of MAS by the audit firm, and the degree of competition in the audit services market. A full-factorial, repeated measures ANOVA experiment was conducted using senior loan officers as subjects. The results indicate that a client in good financial condition is perceived as being more likely to obtain its preferred outcome to an audit conflict than a client in poor financial condition. Clients are also viewed as being more likely to obtain their preferred resolution to a conflict when the conflict issue is not dealt with precisely by the technical standards.]

Reviews the book `International Accounting and Auditing Trends,' by Vinod B. Bavishi.