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The relationship between auditors and top managements is fundamental to the integrity of financial reporting and the audit process . This research provides evidence concerning the extent , nature and outcome of interactions between auditors and top management. These interactions range from simple exchange of information to negotiation to conflict and may result in changes to the financial reports .An extensive set of 48 issues relating to accounting principles and practice , disclosure , other balance sheet areas and compliance matters is identifiedin the developed countries. We tried to examine these issues in Libya .We used a questionnaire instrument to identify which of these issues are discussed or negotiated between the external auditors and the top management in the Libyans corporations and may result in a change to either the accounting numbers or disclosures. Further the research employed deductive –inductive approach as a scientific accounting methodology approved and used by financial accounting standard board (FASB) .The approachincludes the review of the related accounting studies todetermine the theoretical framework of the researchin order to configure and define the different variables that can generally affect the interaction between external auditors and top management and then limiting the different variables that can affect the interaction between external auditors and top management in the Libyans corporations . Finallywe compare the experimental conclusions (the results of statistical analyzes) with the theoretical conclusions of the research (theoretical framework for research) Wefoundsignificant differences between the answers of the two groups concerning 10 financial items . The results indicates that the existing or composingof an audit committeein the client company, the size of auditor fees from audit operation and the amount of the unpaid auditor fees can decrease the external auditor resistance to management pressures and may result in a change to financial statements in favor of management , while the actual presence of audit committee in the company and the size of audit office oraudit companycan increase the external auditor resistance to management pressures and can result in a change to financial statements in favor of external auditor .
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