Did the COVID-19 pandemic affect auditors’ client acceptance and continuance decision-making process?

Abstract

Purpose: The aim of the present study is to explore the impact of the COVID-19 pandemic on the first stage of external audit, namely, on the auditors’ client acceptance and continuance decisions (CACDs). Design/methodology/approach: Survey data was collected on the basis of a structured questionnaire, which was answered by 21.02% of the Greek certified auditors/accountants. Parametric hypothesis testing and regression analysis were used in data analysis. Findings: The results of the survey showed that the COVID-19 pandemic had a different impact on the client acceptance decision-making (CAD) process and the client continuance decision-making (CCD) process. The CAD process appears to have been affected in a mostly negative way, and to a greater extent than is the case with the CCD process. The impact of the COVID-19 pandemic on the CACD process appears to be mainly related to the difficulty arising in auditor–client communication. Additionally, as far as the CAD process is concerned, the COVID-19 pandemic appears to have had a negative impact on the audit fees, while, when it comes to the CCD process, the pandemic has had a positive impact with regard to clientele expansion. Finally, survey findings showed that the COVID-19 pandemic affected in a different way Big6 and non-Big6 auditors. Originality/value: The present study aspires to fill significant gaps identified in relevant literature with regard to auditors’ work in correlation with the COVID-19 pandemic. More specifically, to the best of the author’s knowledge, it is the first study exploring the impact of the COVID-19 pandemic on the first stage of external audit. Moreover, the study is based on primary data collected in real time, under the actual conditions of emergency related to the health crisis. Last but not least, the findings of the present study could be of value to professionals and regulative authorities in case of similar future emergencies or potential crisis situations.