Proposal readability, audit firm size and engagement success: Do more readable proposals win governmental audit engagements?

Yu Tzu Chang, Dan N. Stone

Research output: Contribution to journalArticlepeer-review

9 Scopus citations


Purpose: This paper aims to examine the effects of firm size on audit proposal readability and audit proposal readability on auditor selection using readability metrics. Design/methodology/approach: Adopting the Flesch reading ease readability formula, the authors analyze the readability of 370 hand-collected audit proposals submitted by audit firms for US state and local governments’ audit service contracts. Findings: The authors find differences in readability across audit firm size, specifically the proposals written by smaller firms are more readable than those submitted by larger firms. The results further indicate that readability metrics correlate with auditor selection, i.e. an increase in audit proposal readability from the first to third quartile improves the likelihood of a firm winning the engagement by about 6 per cent, ceteris paribus. In addition, while audit fees and an existing auditor–client relationship are associated with engagement success, proxies for audit quality (i.e. audit firm size, audit experience of lead partner) are not. Research limitations/implications: The Flesch reading ease measure is a simple linear combination of text attributes, which assumes that readability is a single, unidimensional construct. Simple readability metrics, such as the Flesch reading ease, may confound environmental complexity with readability. Practical implications: Readability improves audit proposal success. Originality/value: The results provide insight to accounting stakeholders regarding the potential influence of readability on audit firm selection. In short, readability matters.

Original languageEnglish
Pages (from-to)871-894
Number of pages24
JournalManagerial Auditing Journal
Issue number8
StatePublished - Oct 7 2019

Bibliographical note

Publisher Copyright:
© 2019, Emerald Publishing Limited.


  • Audit proposal
  • Auditor selection
  • Governmental audit procurement process
  • Readability

ASJC Scopus subject areas

  • Accounting
  • General Economics, Econometrics and Finance
  • General Business, Management and Accounting


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