Contemporary Accounting Research for Investment- MyAssignmenthelp

Question: Discuss about theContemporary Accounting Research for Investment. Answer: Introduction Pressure from the client on the auditor is very much common .The concept of explicit pressure on the auditor from the client, is very much prominent and provides a brief look out in the overall image of management of client, where the client tries to intimidate the auditors, the client threatens the auditor that they will terminate their relationship. It is very much prominent that client can bring pressure without any intimidation. Such threats are generally not part of any client auditor relationship. For example, that the clients can insist on asserting lenient in one period of accounting by the auditor, and stating that the auditor will have higher fees if in the future the auditor is ready to assert such lenienacncy. In cases where the auditor feels that his professional judgement is being directly challenged by a client, and his independence is at stake, he can take resort to professional standards to provide him guidelines on how to take charge of the situation and also how to ensure the required level of sceptics. The standards provide the required amount of guidance on how the auditor should behave when the client engages in such type of activity of putting explicit pressure on the auditor not allowing him to do his duty. The client managers can also try to influence the decision of the auditor based on the fact as to how the overall interests of the auditor are aligned with that of the client, and how the auditor should follow what the management is telling him to do, if he wants to excel in this field. The client can put a pressure on the auditor to go as the management is telling so that there is a win-win situation for both. If the auditor does as the client is saying, the audit firm will have a profitable relationship with the management in the future. The aim of the client is to raise awareness among the auditor regarding the profitable relationship both the parties can share if one goes with the other. It should be the overall goals of the audit or to go in the direction of what the client is telling him to do and not go against it, if he wants to gain anything from the client in the future. Thats the kind of explicit pressure that is asserted by the client on the auditor. (Felix, W. L., Grambling, A. A., Mayetta, M. J. (2005). In case of asserting implicit pressure the client may ask the auditor to make adjustments as he feels like in the light of various profitable decisions made by him. Next the audit firm will work for the client based on the kind of work that the impression that the auditor forms of the client, that is the kind of implicit pressure faced by the auditor on the light of his duties. On one hand the auditor has to do what the client is telling, on the other hand the audit firm has its owns set of rules and regulations that the auditor is required to follow. The auditor will be required to do something so that he can ease out all the pressure that is being exerted on him and can take steps to nullify the same. Implicit pressures are not bluntly stated by the client, but are somewhere or the other implied in their system. In case of explicit pressure the client states as and what he wants the auditor to do, and the auditor has to do the same. That is one of the major differences between the implicit and explicit type of client pressure. (Kennard, W. N., Link, M. M., Worrall, E. M. (1997). It is true that there are so many threats to the auditors independence and it may not be possible for him to work in the best of his ability , but thats where the auditor need to follow his code of ethics and do his job to the best of his ability . The auditor should not give to the pressure that the clients exert on him. It totally depends on the willingness of the auditor to accept what the client is saying him to do, and the level of changes that he do depending on the demand of the client. The stand of the auditor plays a major part on the overall pressure that it faces internally externally in his work. The auditor should see that there must not be any breach of his code of conduct ,and in case the client is not ready to lessen the pressure he should modify the audit report and comment on the same accordingly. (Knapp, M. C. (1985). Audit conflict: ) References The influence of non-audit service revenues and client pressure on external auditors' decisions to rely on internal audit.Contemporary Accounting Research,22(1), 31-53. Audit conflict: An empirical study of the perceived ability of auditors to resist management pressure.Accounting Review, 202-211. Client pressure in the commercial appraisal industry: how prevalent is it?.Journal of Property Valuation and Investment,15(3), 233-244.