The relationship between transformational client leadership and auditor objectivity

Abstract

Purpose

The purpose of this paper is to investigate whether transformational leadership affects auditor objectivity.

Design/methodology/approach

The investigation is based on a field survey of 198 practicing auditors employed by audit firms operating in Sweden.

Findings

This study finds that transformational client leadership negatively affects auditor objectivity and that the effect is only partially mediated by client identification. Given these results, suggesting that auditors are susceptible to influence by their clients’ perceived exercise of transformational leadership, leadership theory appears relevant to the discussion of auditor objectivity in the accounting literature.

Originality/value

Previous accounting research has applied the social identity theory framework and found that client identification impairs auditor objectivity. However, the effect of transformational client leadership on auditor objectivity, which reflects an intense auditor-client relationship, has been neglected before this study.

Citation

Svanberg, J., Öhman, P. and Neidermeyer, P.E. (2017), "The relationship between transformational client leadership and auditor objectivity", Accounting, Auditing & Accountability Journal, Vol. 30 No. 5, pp. 1142-1159. https://doi.org/10.1108/AAAJ-07-2015-2119