Going Beyond Being Tired in Client Negotiations: Depletion Effects Diverge for Skeptic versus Client Service Auditors

We experimentally examine how depletion affects auditors’ behaviors during negotiations with client managers over financial statement amounts. Depletion, a state of reluctance to exert self[1]regulation effort, tilts people toward natural, low effort behaviors. Our theory predicts that whether auditors have a skeptic disposition that aligns with challenging behaviors—versus the theoretical countervailing alternative of a client service disposition aligning with client and efficiency-focused behaviors—will determine depletion effects in the negotiation setting. We conduct an abstract experiment with incentives whereby students in an auditor role engage in “back and forth” negotiations with students in a manager role, in which we manipulate depletion and measure auditors’ trait skepticism. As predicted, depletion has diverging effects: relative to non-depleted, depleted skeptics challenge managers further from their initial negotiation positions, whereas depleted client service auditors challenge less. In a supplemental study, we develop a direct measure of auditors’ skeptic versus client service disposition that is rooted in the skepticism literature and audit ecology. Qualitative data with highly experienced auditors supports the idea that our measure is realistic and captures a form of trait skepticism, and also provides their insights on depletion in their day-to-day environment.