INTRODUCTION

Prior auditor–client negotiation research has considered auditors’ use of different negotiation strategies that are employed when resolving disputed financial reporting issues (e.g., Brown & Wright, 2008). Some nonexperimental studies exist in this stream of research, including interview or survey‐based studies (e.g., Beattie, Brandt, & Fearnley, 2000; Beattie, Fearnley, & Brandt, 2004; Gibbins, McCracken, & Salterio, 2007; Gibbins, Salterio, & Webb, 2001; Hollindale, Kent, & McNamara, 2011), but most auditor–client negotiation studies are conducted using the experimental method. Building on the studies of Gibbins and coworkers (Gibbins et al., 2007, 2001; Gibbins, McCracken, & Salterio, 2005), the main purpose of this paper is to complement prior experimental findings, in particular in Gibbins, McCracken, and Salterio (2010), on auditors’ use of different negotiation strategies and tactics using survey‐based retrospective recall of auditors regarding how they recently resolved a disputed misstatement in the financial statements with their clients. More specifically, we first investigate which negotiation strategies and tactics auditors used in an experiential setting. We then focus on audit partners’ use of contending tactics in relation to three context variables identified by previous research (Gibbins et al., 2005, 2001) as likely to be associated (either positively or negatively) with the use of a contending negotiation strategy by the auditor. The choice of variables is based on the importance ratings in Gibbins et al. (2001), as well as mixed findings or a lack of findings on the impact of the variables in prior research. These variables are: (i) the precision of the accounting standard related to the issue under dispute (expected positive relationship); (ii) the audit partner’s negotiation experience, measured both as years of partner experience (a general experience measure) and task‐specific negotiation experience (expected positive relationship); and (iii) the auditor–client relationship, measured as how positively it is perceived by the auditor (expected negative relationship). Finally, we complement the findings in Gibbins et al. (2001) as we investigate the relative importance of different context variables on auditors’ use of the contending negotiation strategy and on the accounting outcome of the negotiation (i.e., who is “winning” the negotiation).