Client Identification and Client Commitment in a Privately Held Client Setting: Unique Constructs with Opposite Effects on Auditor Objectivity

In this paper, we examine individual auditors' identification with, and commitment to, privately held clients, and their effects on auditor objectivity. Client identification reflects the extent to which an auditor's self-concept and self-definition are derived from a perceived oneness with the client. In contrast, client commitment reflects a responsibility for and a dedication to the client, but the auditor and client remain separate psychological entities. Drawing from the unique perspectives of social identity theory and social exchange theory, we hypothesize and find that client identification is distinct from client commitment. Further, we hypothesize and find that client identification and client commitment have different effects on auditor objectivity. Specifically, client identification is negatively related to auditor objectivity, whereas client commitment is positively related. The findings of this study apply predominantly to the audit of private companies where clients are more likely to exert influence over auditors and auditors may be less likely to withstand client pressures.