The Effect of Leadership Power of Client CFO on Auditor Advocacy Attitude

Among the important issues in resolving ambiguities between client management and independent auditors is the type of relationships formed between client managers and auditors, which are affected by client management attributes such as the leading power of client CFO. The main objective of the present study is to investigate the effect of the leading power of client CFO on auditor advocacy attitude in judgment and decision-making processes. The statistical population consists of professional auditors, working in trusted audit institutions in the Tehran stock exchange in 2019. To this end, a total number of 153 auditors are selected. To collect the data and test the research hypotheses, a questionnaire and the structural equations modeling with the use of the AMOS software is employed. The results indicate that the leadership power of the client CFO has a significant positive effect on auditor advocacy attitude and client identification. Moreover, auditor advocacy attitude and client identification positively impact acquiescing to client-preferred position, in conditions of ambiguity. On the other hand, the findings show that auditors’ professional identity harms auditors’ acquiescence to client-preferred treatment. The results show that some of the client's attributes such as the leading power of the client CFO can destroy the objectivity in the auditor's judgment and decision-making process through the auditor advocacy attitude.