Impression Management in Public Sector Audit Proposals: Language and Fees

Yu Tzu Chang, Dan N. Stone

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


We adapt impression management theory to investigate: (1) whether governmental audit proposals include the values of ‘professionalism’ (i.e. independence and competence) and ‘commercialism’ (i.e. client cooperation, auditor trustworthiness, client satisfaction, commercial interests), and, (2) the relations of audit proposal language and contextual influences on proposed audit fees and proposal success. The results suggest that proposals accord with audit firms’ market strategies. Compared to other firms, proposals from small, non-specialist firms use more commercial language, while proposals from governmental specialist firms use more competence language. The results also suggest that the market for US public sector audits includes many low cost, low quality firms; specifically, the modal proposal (41.2%) includes high use of commercialism language and low proposed audit fees. We also find that audit firms propose higher audit fees in US states with a weak governmental internal auditing office, and, that greater use of commercial language correlates with higher rates of proposal success, but only in US states with weak governmental internal auditing functions. The finding of inter-relations between proposal language, the strength of governmental internal audit functions, and proposed fees suggests the value of considering multiple influences on the quality of the public sector financial controls. Acronyms : American Institute of Certified Public Accountants (AICPA); Certified Public Accountant (CPA); Corporate social responsibility (CSR); European Court of Auditors (ECA); European Union (EU); fixed effects (FE); General Accountability Office (GAO); Governmental Financial Officers Association (GFOA); Independent Regulatory Board for Auditors (IRBA); Institute of Internal Auditors (IIA); International Accounting Education Standards Board (IAESB); International Federation of Accountants (IFAC); International Organization of Supreme Audit Institutions (INTOSAI); National Association of State Auditors; Comptrollers and Treasurers (NASACT); not-for-profit (NFP) entities; natural language processing (NLP); Office of Management and Budget (OMB); Request for proposal (RFP); Two-stage least squares (2SLS); United Kingdom (UK); United States (US).

Original languageEnglish
Pages (from-to)311-343
Number of pages33
JournalEuropean Accounting Review
Issue number2
StatePublished - 2023

Bibliographical note

Publisher Copyright:
© 2021 European Accounting Association.


  • Audit firm strategy
  • Audit proposals
  • Commercialism
  • Impression management
  • Professionalism

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Economics and Econometrics
  • Accounting
  • Economics, Econometrics and Finance (miscellaneous)
  • Arts and Humanities (miscellaneous)
  • History
  • Business and International Management
  • Finance


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