Since most audit engagements identify multiple proposed audit adjustments, auditors must decide how best to present and negotiate these adjustments with their clients. Prior research indicates that auditors can negotiate adjustments individually (a sequential strategy) or can negotiate multiple adjustments within the same negotiation setting (a simultaneous strategy). This paper examines the relative effectiveness of a simultaneous versus sequential negotiation strategy in eliciting concessions from clients and engendering greater client satisfaction. Participants negotiated audit adjustments with a simulated auditor who employed one of the two negotiation strategies. We find evidence that a simultaneous strategy elicits significantly greater total concessions from client managers and also generates more positive attitudes toward the auditor. We also manipulate the magnitude of the issues negotiated and find that significantly greater concessions are offered when larger issues are presented first. These findings have important implications for auditors, as they suggest that negotiating issues simultaneously and presenting larger issues first can result in significantly improved negotiation outcomes.

In this paper, we propose that affective reactions are integral to accounting decision contexts like capital budgeting, and that researchers must jointly consider affect and cognition to better understand accounting decision makers' behavior. We argue that interpersonal relationships are characteristic of many capital‐budgeting contexts, and that these relationships can lead to emotional affective reactions. For example, reactions such as frustration and anger may result if a manager is treated unfairly by another individual involved in a capital project. Drawing on relevant work in neurobiology and psychology, we then predict that these affective reactions can influence managers' capital‐budgeting decisions. We report on four experimental scenarios that demonstrate the impact of affective reactions on capital‐budgeting decisions. Consistent with our predictions, the results indicate that managers consider both financial data and affective reactions when evaluating the utility of an investment alternative. Our results suggest that researchers should consider both affect and cognition to more fully understand decision making in accounting contexts.

In this paper, we propose that affective reactions are integral to accounting decision contexts like capital budgeting, and that researchers must jointly consider affect and cognition to better understand accounting decision makers' behavior. We argue that interpersonal relationships are characteristic of many capital-budgeting contexts, and that these relationships can lead to emotional affective reactions. For example, reactions such as frustration and anger may result if a manager is treated unfairly by another individual involved in a capital project. Drawing on relevant work in neurobiology and psychology, we then predict that these affective reactions can influence managers' capital-budgeting decisions. We report on four experimental scenarios that demonstrate the impact of affective reactions on capital-budgeting decisions. Consistent with our predictions, the results indicate that managers consider both financial data and affective reactions when evaluating the utility of an investment alternative. Our results suggest that researchers should consider both affect and cognition to more fully understand decision making in accounting contexts.