To read this content please select one of the options below:

Proposal readability, audit firm size and engagement success: Do more readable proposals win governmental audit engagements?

Yu-Tzu Chang (Department of Accounting, National Chengchi University, Taipei City, Taiwan)
Dan N. Stone (Von Allmen School of Accountancy, University of Kentucky, Lexington, Kentucky, USA)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 26 June 2019

Issue publication date: 7 October 2019




This paper aims to examine the effects of firm size on audit proposal readability and audit proposal readability on auditor selection using readability metrics.


Adopting the Flesch reading ease readability formula, the authors analyze the readability of 370 hand-collected audit proposals submitted by audit firms for US state and local governments’ audit service contracts.


The authors find differences in readability across audit firm size, specifically the proposals written by smaller firms are more readable than those submitted by larger firms. The results further indicate that readability metrics correlate with auditor selection, i.e. an increase in audit proposal readability from the first to third quartile improves the likelihood of a firm winning the engagement by about 6 per cent, ceteris paribus. In addition, while audit fees and an existing auditor–client relationship are associated with engagement success, proxies for audit quality (i.e. audit firm size, audit experience of lead partner) are not.

Research limitations/implications

The Flesch reading ease measure is a simple linear combination of text attributes, which assumes that readability is a single, unidimensional construct. Simple readability metrics, such as the Flesch reading ease, may confound environmental complexity with readability.

Practical implications

Readability improves audit proposal success.


The results provide insight to accounting stakeholders regarding the potential influence of readability on audit firm selection. In short, readability matters.



The authors are grateful for helpful comments from Louise Hayes (the editor), Efrim Boritz (the reviewer), Mary Curtis (the reviewer), Jerrard Gaertner (the discussant) and participants at the 2017 Research Symposium at University of Waterloo. Thanks to the University of Kentucky, the Von Allmen School of Accountancy, the Gatton College of Business and National Chengchi University (Taiwan) for financial support. Thanks also to Professor Chang’s dissertation committee members (Simon Bonner, Monika Causholli and Urton Anderson) for help and support and to Kinney Poynter of the National Association of State Auditors, Comptrollers and Treasurers (NASACT) for assistance and insights.

This paper forms part of a special section “Textual-Analysis for Research in Professional Judgment and Decision Making, Audit and Assurance, Risk, Control, Governance, and Regulation”, guest edited by Louise Hayes.


Chang, Y.-T. and Stone, D.N. (2019), "Proposal readability, audit firm size and engagement success: Do more readable proposals win governmental audit engagements?", Managerial Auditing Journal, Vol. 34 No. 8, pp. 871-894.



Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

Related articles