The Role of Communication Mode in Auditor-Client Interactions: Insights from Staff Auditors

With the off-shoring of routine audit tasks and the explosion of automated audit procedures, staff auditors are expected to execute a significant number of client-facing tasks. These tasks generally require auditors to interact with clients face-to-face (FTF) or, in an increasingly remote work environment, use telephone or email. Recent research suggests staff auditors use email more frequently to communicate with clients compared to auditors at the manager and partner levels (Bennett and Hatfield 2018). Junior auditors often use email because they feel intimidated by older, more experienced clients, and in response to this “social mismatch,” they avoid FTF communication or avoid communication altogether (Bennett and Hatfield 2013). Similarly, Carlisle, Gimbar, and Jenkins (2020) find that after experiencing difficult or anxiety-inducing communications, staff auditors delay or avoid subsequent communications with clients, particularly those that are FTF.

Research also suggests auditors' choice of communication mode can have important implications for the audit. For instance, audit partners have expressed concerns that staff auditors may be over-relying on email communications and, as a result, they may not be asking enough follow-up questions or building client relationships (Bennett and Hatfield 2018). Furthermore, when auditors request information via email, research finds that clients respond in a more biased (i.e., self-serving) manner compared to in-person requests (Saiewitz and Kida 2018). However, email communications also can benefit the audit. Because emails are textual in nature and lack in-person social cues, auditors evaluate a client's explanation more objectively when it is received through email as opposed to FTF (Carlisle and Jenkins 2020; Hawkins 2020).

Despite the importance of communication mode within an auditing context, we know relatively little about how staff auditors choose a mode of communication and how this choice affects their interactions with clients (and vice versa). As such, in this study, we report the results of a survey that examines staff auditors' experiences interacting with audit clients and the role of communication mode in these interactions. We find that most staff auditors prefer to communicate FTF rather than via email, which is surprising since the assumption is often the opposite. Despite this preference for FTF interaction, the communication mode used most frequently by auditors is actually split relatively equally between FTF and email. Furthermore, when choosing a communication mode, auditors report that their most important considerations are the urgency of the matter and the nature of the evidence to be collected. However, auditors who communicate most through email, versus FTF, appear to take different factors into consideration when choosing their mode of communication. Specifically, auditors who communicate most through email place less value on (1) client relationship building, (2) clients' communication mode preferences, and (3) the ability to ask follow-up questions.

We also asked staff auditors about the nature of their client communication experiences. Our participants report experiencing various communication anxieties, with the most prevalent stemming from feeling less knowledgeable than the client. Furthermore, auditors who prefer communicating with clients via email report feeling this knowledge-related anxiety more frequently than auditors who prefer FTF, which is consistent with the idea that email helps minimize anxieties resulting from the “mismatch” between novice auditors and their more experienced clients. Staff auditors also report that most of their client interactions are positive (61.9 percent), while only a small proportion are negative (11.4 percent). Interestingly, we find that auditors who report using FTF communication more frequently also report a greater proportion of positive client interactions. This could suggest that FTF interactions tend to be more positive in general or auditors who have experienced more positive interactions choose to communicate FTF more frequently (e.g., they are more comfortable with this mode). Understanding what may contribute to positive versus negative client interactions is important, as our study suggests such experiences could affect audit outcomes. Specifically, we find that auditors who report less positive client interactions are more likely to experience communication anxieties and less likely to follow up with the client as a result of those anxieties. This finding has implications for audit quality, as it suggests staff auditors may fail to collect sufficient audit evidence when they have experienced more difficult client interactions.

We recruited 128 participants who were either currently working as staff auditors or had worked as staff auditors within the past year (i.e., auditors recently promoted to senior). Participants were recruited from a regional CPA firm in the southeast United States, a Big 4 firm, and personal contacts with recent alumni of two large public universities. These recruitment procedures resulted in participants representing a variety of audit firms, including Big 4 (28 percent), non-Big 4 international/national (29 percent), and regional (43 percent). Fifty-six percent of respondents are male, 41 percent are CPAs, and 65 percent have a Master's degree. Participants averaged 12.74 months of audit experience. Participant demographics are summarized in Table 1.

We used an online questionnaire (administered through Qualtrics) to examine staff auditors' experiences communicating with audit clients.¹ Specifically, we asked participants about the communication modes they prefer and the modes they use most frequently. To elicit preferred mode, participants ranked the following communication modes from most preferred (1) to least preferred (7): FTF, email, telephone, texting, instant messaging, video calls, and other. To elicit auditors' most used mode, we asked participants to indicate the percentage with which they communicate with the client using the same modes listed above; the mode assigned the highest percentage was identified as participants' most used mode.

To understand how staff auditors select a communication mode, we asked participants, “When deciding how to communicate with the client, to what extent do you consider the following factors to be important in choosing your method of communication?” Participants then rated a series of factors on five-point scales, from 1 = “Not at all important,” to 5 = “Extremely important.” Participants also provided information about their communication anxieties by answering the question, “When communicating with the client, how frequently do the following items cause you anxiety?” Participants rated a number of potential anxieties using seven-point scales, where 1 = “Never,” and 7 = “Always.”

Finally, we asked auditors the percentage of their client communications that are positive and productive, negative and unproductive, or neutral, and explored a number of factors that may contribute to the positivity of auditors' communication experiences. Specifically, auditors indicated how often they work on audit tasks without a clear understanding of what they are doing (on a scale from 1 = “Never” to 7 = “Always”), the extent to which they believe their firm prepared them well to communicate with the client (on a scale from 1 = “Strongly disagree” to 7 = “Strongly agree”), and how often they transition between audit engagements (on a scale from 1 = “Never” to 7 = “All the time”). We also asked auditors to recall and describe a specific interaction they have had with a client. We provide quotes from these written descriptions throughout Section III to help supplement our statistical findings.

Figure 1 presents results related to the communication mode preferred by auditors and the mode used most frequently. We find (in Panel A) the majority of staff auditors prefer to communicate FTF, with 92 participants (71.88 percent) ranking FTF as their most preferred method of communication. Thirty-three participants (25.78 percent) rank email as most preferred, and only three participants (2.34 percent) indicate a mode other than FTF or email as most preferred. Although most staff auditors prefer to communicate FTF, only 61 participants (47.66 percent) report using FTF most frequently, while 57 participants (44.53 percent) report using email most frequently (see Panel B).² That is, it appears staff auditors frequently use a communication mode that differs from their preferred mode. Accordingly, we examine factors that may influence auditors' preference for, and use of, different communication modes and consider circumstances under which the two may diverge.

One factor that may influence auditors' communication mode preferences are the anxieties they feel when communicating with clients. Specifically, auditors who frequently experience communication anxieties may prefer a more remote mode of communication (e.g., email). Accordingly, we asked staff auditors how frequently they experience various communication anxieties in practice (on a scale from 1 = “Never” to 7 = “Always”). The results of this question are shown graphically in Figure 2. The most frequent anxiety felt by staff auditors is feeling less knowledgeable than the client (Mean of 4.84) (i.e., this is the only anxiety with a mean that does not differ significantly from a scale value of 5 = “Frequently,” p = 0.153, untabulated).³ Staff auditors also report that feeling less experienced than the client (Mean = 4.53) and the fear of interrupting or annoying the client (Mean = 4.48) are anxieties they feel more than “sometimes” (i.e., both means are significantly greater than a scale value of 4 = “Sometimes,” p-values < 0.001, untabulated).

Staff auditors who experience greater communication anxieties may prefer email, given its remote nature and potential to minimize social anxieties. Accordingly, we investigate whether communication anxieties differ for auditors who prefer email versus FTF communication.⁴ As reported in Table 2, Panel A, auditors who prefer email, versus those who prefer FTF, experience significantly more anxiety related to feeling less knowledgeable (Means = 5.24 and 4.67, respectively; p = 0.029) and less experienced (Means = 5.03 and 4.33, respectively; p = 0.013) than the client.⁵ This suggests that while all auditors feel anxious to some extent about being less knowledgeable and experienced than clients, those who feel these anxieties more frequently prefer to avoid in-person interactions.

To better understand auditors' anxieties related to feeling less experienced and knowledgeable than the client, we perform two additional analyses. First, participants had the opportunity to indicate “other” factors that cause them anxiety beyond those listed in Table 2, Panel A. Our review of these other factors reveals further auditor anxieties stemming from a lack of knowledge and understanding. Specifically, auditors reported having anxieties over “Having to ask questions I don't fully understand myself” and “Fear of asking dumb/base level questions that would make me look bad in eyes of ‘in charge,' management and the client.” Second, we asked auditors to describe a specific client interaction they have experienced in practice. Upon reviewing these descriptions, we find numerous examples in which staff auditors express worry over appearing unprepared or unknowledgeable when interacting with the client:

We also noted an example in which an auditor described a positive and productive client communication experience, which involved a client that was perceived as having a similar level of knowledge and experience as the auditor:

These quotes suggest staff auditors are aware of their knowledge/experience deficits and how these deficits might impact their ability to effectively communicate and to appear competent in the eyes of the client.⁶

As noted previously, auditors do not always use the communication mode they most prefer. This suggests some circumstances prompt auditors to use a mode of communication that might differ from their preferred mode. To understand how auditors choose their mode of communication, we asked participants how important various factors are when deciding how to communicate with the client (on a scale from 1 = “Not at all important” to 5 = “Extremely important”). The results of this question are shown graphically in Figure 3. The two most important factors staff auditors consider when choosing a communication mode are the urgency of the matter (Mean = 4.48) and the nature of the evidence to be collected (Mean = 4.38) (i.e., these are the only two items with means that are significantly greater than 4 = “Very important”; p-values < 0.001, untabulated). Other factors considered “Very important” (i.e., means that do not differ significantly from 4; p-values > 0.08, untabulated) include the ability to ask follow-up questions (Mean = 4.05), the client's preferred mode (Mean = 3.99), the ability to think through before responding (Mean = 3.91), client relationship building (Mean = 3.87), and convenience (Mean = 3.87).

We anticipate auditors who mostly use FTF communication are likely to find different factors important when choosing their communication mode compared to auditors who mostly use email. Accordingly, we test whether the importance of each factor in Table 2, Panel B differs for auditors who mostly use FTF versus email.⁷ We find that auditors who communicate most FTF value the ability to ask follow-up questions (Mean = 4.28) more than auditors who mostly use email (Mean = 3.80; p = 0.002). In addition, auditors who communicate most FTF value the client's mode preference (Mean = 4.18) and building client relationships (Mean = 4.13) more than auditors who primarily use email (Means = 3.82 and 3.57, respectively; p = 0.051 and 0.002, respectively).

We note that the two factors auditors judge as most important when choosing a communication mode—the urgency of the matter and the nature of the evidence to be collected—do not differ significantly between auditors who primarily use FTF and those who use email (p-values > 0.60, Table 2, Panel B). That is, auditors generally agree these are the most important factors influencing their choice of communication mode regardless of which mode they use most frequently in practice. On the surface, this similarity in judgments may seem unexpected. However, it is important to recognize that an auditor's choice of communication mode is not only influenced by which factors (from Table 2, Panel B) the auditor judges as most important, but also by the frequency with which those factors are actually encountered in practice. For instance, an auditor could believe it is very important that FTF communication be used for urgent matters, but if that auditor has not encountered many urgent matters in practice, then this “important” factor will have little impact on which mode they actually use.⁸

Because the results we report in Table 2, Panel B are limited in their ability to provide insight on how certain factors impact auditors' choice of communication mode, we examine auditors' descriptions of a specific interaction they have had with a client to gain further insight on this matter. We focus our examination on the two factors auditors deem most important when choosing a communication mode: (1) the urgency of the matter, and (2) the nature of the evidence to be collected.

As might be expected, our review of the client communication experiences recounted by participants reveals that when auditors mention urgency as important, they indicate the need for FTF (i.e., in-person) communication:

Furthermore, some participants indicated that clients can easily avoid or ignore emails, and therefore, email is not an effective mode for issues that need to be resolved quickly:

Based on these responses, it appears that for urgent matters, staff auditors generally believe FTF communication is more effective than email.

To understand how “the nature of the evidence to be collected” influences auditors' choice of communication mode, we coded each client interaction based on whether it involved a document request and/or an inquiry (e.g., asking questions, discussing a process). We also coded whether the interaction involved email and/or FTF communication. We find that auditors are more likely to use email when their client communication involves a document request (75.6 percent) compared to when it does not involve a document request (58.6 percent, χ² = 3.49; p = 0.062, untabulated). We further find that auditors are less likely to use email when their client communication involves inquiry (54.5 percent) compared to when it does not involve inquiry (78.4 percent, χ² = 7.60; p = 0.006, untabulated). In contrast, the use of FTF communication does not differ based on whether the communication involved a document request (p = 0.481) or client inquiry (p = 0.566, untabulated).⁹ Overall, these results suggest that the nature of the evidence to be collected influences auditors' use of email, with document requests (inquiry) prompting greater (lesser) email use. In contrast, this factor does not appear to influence auditors' use of FTF, since both document requests and client inquiry can be effectively accomplished using FTF communication.

Our analyses thus far suggest that at times circumstances prompt auditors to use a communication mode that might differ from their preferred mode (e.g., the use of FTF for urgent matters and email for document requests). Consistent with this idea, we find (in Figure 1) that 71.88 percent of auditors prefer FTF, while only 47.66 percent actually use FTF most frequently. To understand this preference-use inconsistency, we look at the subset of auditors who prefer FTF and examine what may lead these auditors to use a nonpreferred mode (i.e., email). Of the 92 participants who prefer FTF, 53 (57.61 percent) report using FTF most frequently, and 30 (32.60 percent) report using email most frequently (the remaining nine use FTF and email equally and are dropped from the analysis that follows). Using these two subsamples of participants, we examine whether they consider different factors (from Table 2, Panel B) important in choosing a communication mode. We find that participants who prefer and use FTF most frequently believe it is significantly more important to consider (1) the ability to ask follow-up questions (Mean = 4.28), and (2) client relationship building (Mean = 4.26) compared to participants who prefer FTF but use email most frequently (Means of 3.60 and 3.47, respectively) (p-values < 0.001, untabulated).

Taken together, these results complement prior research, which suggests FTF communication allows auditors to ask questions more easily and promotes relationship building with clients (Bennett and Hatfield 2018). Our results suggest auditors who use email most frequently place less value on these features of the communication mode. In addition, it appears that although most participants prefer FTF communication, those who place less value on the ability to ask follow-up questions and client relationship building are more likely to forgo their preferred mode and instead use email.

Thus far, we have examined factors influencing the communication modes preferred and used by staff auditors. However, because our participants are early in their careers, their initial experiences communicating with clients are likely to further shape their perceptions of and approaches to client communications (e.g., development of anxieties, willingness to communicate, mode used). Table 3, Panel A reports the percentage of staff auditors' communications with clients that are perceived as positive and productive versus negative and unproductive. We find that 61.90 percent of auditors' communications are perceived as positive, while only 11.40 percent are perceived as negative (with the remainder being neutral). However, we find no significant difference in the percentage of positive or negative interactions between auditors who primarily use FTF (63.52 percent positive and 11.89 percent negative) versus those who use email (61.46 percent positive and 10.07 percent negative). Nonetheless, to examine this relationship further, we test whether there is a significant correlation between the percentage of positive communications reported by auditors and the percentage of communications that occur FTF. We find a positive correlation between these percentages (r = 0.17; p = 0.059, untabulated), suggesting auditors are more likely to use FTF communication as they experience more positive interactions or positive interactions are more likely to occur when auditors interact FTF.¹⁰

Next, we examine four additional factors that may affect whether client communications are positive or negative: (1) how well auditors feel their firm prepared them to communicate with clients, (2) auditors' understanding of audit tasks (which are often the subject of communications), (3) months of audit experience, and (4) the frequency with which auditors move between engagements (suggestive of more experience with a wider variety of clients). These factors are likely to be relevant predictors of staff auditors' communication experiences, given that auditors' primary anxieties stem from a perceived lack of knowledge and experience (see Figure 2)—both of which can be improved through firm training/preparation, and on-the-job experience. Accordingly, we analyze whether these four attributes differ for auditors who report a higher proportion of positive/productive client communications versus those who report a lower proportion.¹¹

Results of these analyses are reported in Table 3, Panel B. We find that staff auditors with a higher proportion of positive communications feel their firm has done a (marginally) better job preparing them to communicate with clients compared to auditors with a lower proportion of positive communications (Means = 5.04 and 4.56, respectively; p = 0.061).¹² We also find that auditors with more positive communications have a better understanding of audit tasks (i.e., they rarely work on tasks without a clear understanding of what they should be doing) compared to auditors with less positive communications (Means = 3.83 and 4.27, respectively; p = 0.020).¹³ When we review participants' descriptions of a specific client interaction they have experienced in practice, we find further evidence to suggest greater preparation and understanding of audit matters foster positive and productive client communications. For instance, one participant described the following positive/productive interaction:

In contrast, another participant described the following interaction as negative/unproductive:

Our review of the client interactions recalled by participants also reveals that staff auditors sometimes look to more experienced members of their engagement team to help them understand and prepare for client communications. In addition to the quote above, which mentions “I felt prepared because I had worked with my senior to know exactly what to ask,” another participant described a time in which a more experienced staff accompanied them during a client inquiry, but failed to fully explain the associated process, noting that the staff “tried to explain the processes to me, but … I have a very hard time following her descriptions/direction with tasks—unlike the senior on the job who is very thorough and explains everything so that I am able to fully understand.” This same participant described feeling “clueless” during the meeting with the client because they were not given “a more thorough description of the process” from the more experienced staff.

Next, we consider the relationship between auditor experience and the nature of auditors' client interactions (see Table 3, Panel B). While audit experience in general does not differ (p = 0.269), we find that auditors with more positive communications transition between audit engagements more frequently (Mean = 4.79) compared to auditors with less positive communications (Mean = 4.24; p = 0.042). This result may suggest that time as an auditor alone is insufficient to increase positive interactions with clients, but that obtaining experience with a wider variety of clients may help auditors achieve more positive, productive communications.¹⁴

Finally, we test whether the nature of auditors' communication experiences (positive or negative) affects auditors' communication anxieties and how they deal with these anxieties. To do so, we average participants' responses to all of the anxiety questions in Table 2, Panel A to create a measure of overall communication anxiety. As shown in Table 3, Panel B, we find auditors with less positive client interactions experience communication anxieties more frequently (Mean = 4.45) compared to auditors with more positive interactions (Mean = 4.00; p = 0.017). Additionally, auditors with less positive client interactions report that their communication anxieties prevent them from following up with clients more frequently (Mean = 3.22) compared to auditors with more positive interactions (Mean = 2.34; p < 0.001).¹⁵ These results suggest auditors who experience more negative client communications early in their careers develop more communication anxieties and a reduced willingness to communicate with clients. Such behavior has audit quality implications, as it suggests auditors may avoid necessary client interactions and fail to collect sufficient evidence after experiencing more negative client interactions. To better understand the audit quality implications of such avoidance behavior, we consider the frequency with which staff auditors' client communications require additional followup. After participants were asked to recall and describe a specific client interaction, we asked them whether they had to follow up with the client after the initial communication and who initiated the followup. We find that of the 128 participants in our survey, 102 (79.7 percent) indicate that additional followup was needed after the initial communication. Furthermore, of the 102 auditors who indicated their initial interaction required followup, 83 (81.4 percent) indicated that they were the party responsible for the followup. Given the frequency with which auditors must follow up with clients (and initiate this followup), even a slight reduction in auditors' willingness to communicate with clients could have serious audit quality implications.

Auditors' interactions with clients could be viewed as positive or negative for a variety of reasons (e.g., efficiency of the communication, complexity of the issue, (mis)understanding). However, we consider one particular factor that is likely to influence auditors' communication anxieties and willingness to communicate: a client's personality and demeanor. Specifically, communicating with an intimidating and rude client is likely to be a stressful and anxiety-inducing experience for staff auditors. And in fact, our review of auditors' descriptions of a specific client interaction reveals several examples of difficult, ill-mannered clients:

This final quote provides an example of how a negative client communication experience can harm audit quality by making auditors reluctant to ask questions. In contrast, the following positive communication experiences involve clients who are friendly and accommodating:

These latter examples illustrate how interacting with friendly, accommodating clients can lead to more positive communication experiences as well as the development of auditor-client relationships. Notably, the final example above indicates that FTF conversation about nonwork topics might help auditors build the type of relationship in which clients feel comfortable being “more forthcoming” when answering questions. Once again, this suggests that client communication experiences have the potential to affect audit outcomes in meaningful ways.

Staff auditors perform the bulk of the detailed work on audit engagements, which often requires communication with clients. Research suggests staff auditors frequently use email for such communications, in part because they feel intimidated by older, more experienced clients (Bennett and Hatfield 2013, 2018). This choice to communicate via email, as opposed to using an alternative mode (e.g., FTF, telephone), can have important implications for the audit (Bennett and Hatfield 2018; Carlisle and Jenkins 2020; Saiewitz and Kida 2018). Therefore, it is important to understand factors influencing auditors' choice of communication mode and how this choice affects the quality of client communications.

In this paper, we report results of a survey conducted with staff auditors to understand their experiences interacting with clients and the role of communication mode in these interactions. While audit partners have expressed concerns that staff auditors over-rely on email for their communications (Bennett and Hatfield 2018), most auditors in our study (71.88 percent) report a preference for FTF communication. Despite this preference, however, we find that auditors report using email and FTF with about the same frequency. This inconsistency between communication mode preference and use raises the question of how these preferences are formed and what may cause auditors to use a nonpreferred mode. We find evidence that staff auditors' communication mode preferences are influenced by anxieties experienced during client communications. Specifically, auditors who prefer email (versus FTF) report more anxiety about being less knowledgeable and experienced than clients, suggesting some auditors prefer email because it minimizes these anxieties. Furthermore, while most auditors in our study agree that the urgency of the matter and the nature of the evidence to be collected are the most important factors when choosing a communication mode, other factors (e.g., building client relationships) are considered to differing degrees by auditors who mostly use email versus those who primarily use FTF.

We believe our study provides important insights for audit practice. Audit firms interested in encouraging greater use of FTF communication can use the results of our study to understand factors that influence auditors' preference for and choice of communication mode. For instance, staff auditors may benefit from training aimed at reducing anxieties that stem from feeling less knowledgeable and experienced than clients. Interestingly, we find these anxieties are reduced for participants who report a greater understanding of audit tasks, suggesting there are benefits to clearly explaining the purpose of audit tasks to staff auditors. Furthermore, audit partners have expressed concerns that by using email, staff auditors may not be asking enough follow-up questions or building client relationships (Bennett and Hatfield 2018). Our study suggests auditors who primarily use email (versus FTF) place less importance on these factors when selecting their mode of communication. As such, audit firms should consider emphasizing when FTF communication is most appropriate and its various benefits. Notably, we find a positive relationship between staff auditors' use of FTF and the frequency of positive, productive client communications, which may suggest FTF communication is well suited for building client relationships and achieving positive communication outcomes.

Like all studies, ours is subject to certain limitations, which should be considered when interpreting our results. Most notably, our use of survey evidence makes it difficult to draw definitive conclusions regarding the direction of causality. For instance, we find that auditors who have experienced a higher proportion of positive client communications report fewer communication anxieties. However, we are unable to determine whether a lack of anxiety causes auditors' communications with clients to be more positive or whether experiencing more positive communications causes a reduction in anxiety. Furthermore, it is difficult to determine how some of our findings may manifest in practice via auditor behavior. Nonetheless, our findings provide important insights regarding the communication experiences of staff auditors, which can be used to inform audit practice and motivate future research.

Finally, as the auditing profession continues to move toward more remote forms of work (e.g., due to technological advancements, social/family dynamics, COVID-19), it will be interesting to consider how auditors' communications with clients will evolve, especially if FTF communication becomes a thing of the past. We complement existing research which investigates how clients perceive and respond to auditors' use of various communication modes (Saiewitz 2018). Our results suggest that while remote communication (e.g., email) may be less anxiety inducing for staff auditors, it may also be less effective in many cases (e.g., for urgent matters and client relationship building). These outcomes (and others) will be important for the auditing profession to consider before adopting fully remote forms of auditing.