SME clients evaluation of audit quality: the roles of auditors' communication effectiveness, rapport and social capital

Abstract

PurposeThis study examines how professional service firms' communication effectiveness (affiliative communications style, social dialogue and information provision), social cognitive capital and rapport established between an auditor and SME client are instrumental in influencing the latter's evaluation of the technical quality of an audit.Design/methodology/approachThe study combines qualitative and quantitative methodologies to create a cross-sectional survey covering four geographic regions in an emerging economy – Thailand. The authors examine the hypotheses by employing social interaction theory.FindingsA study of 744 SME executives plus post-survey interviews with three audit partners revealed that an affiliative communications style and information provision are positively associated with the rapport developed between financial auditor and client, and that rapport, in turn, had a strong association with client perceptions of audit quality. In addition, affiliative communication style, information provision and social cognitive capital had a direct (positive) association with perceptions of audit quality. The effects of communication effectiveness and social cognitive capital varied, depending on whether or not the SME client possessed formal accounting qualifications.Originality/valueThe study contributes to the literature on the business-to-business professional services, and accounting in particular, by explicating the important roles of communication effectiveness, rapport, and social cognitive capital in the relationship between an auditor and a client. Moreover, the paper reveals that the differences in educational background of clients result in differential impacts of communication effectiveness and social cognitive capital on rapport and perceptions of audit quality.

The Auditor Self-Efficacy Scale: Measuring Confidence in Technical Skills, Technological Adaptation, and Interpersonal Communication

“…In the auditing profession, interpersonal communication is paramount, with auditors frequently engaging in client interactions through various channels, from direct meetings to digital communications (Carlisle & Hamilton, 2021;Sarapaivanich et al, 2023). Bandura's (1977Bandura's ( , 1986Bandura's ( , 1997 concept of self-efficacy is crucial here, reflecting auditors' confidence in their ability to effectively convey complex information and adapt their communication style to diverse client needs.…”