Can individual auditors' career advancements predict audit partner quality?

• 成果类型: Article; Early Access
• 署名作者: Micale, Joseph A.
• 署名单位: New Jersey Institute of Technology
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.70014
• 发表日期: 2025
• 关键词: big 4; MARKET; conservatism; earnings; industry; proxies; pcaob; term; TIES

摘要

This mixed-methods study investigates whether individual auditors' career advancements to more prestigious audit firms can predict their audit quality. Using hand-collected data on more than 2,000 audit partners from professional networking website profiles, I identify audit partners with advancements from less to more prestigious audit firms and empirically test whether these upward trajectories predict audit partner quality. I find that these audit partners provide higher-quality audits, as evidenced by discretionary accruals and going-concern opinions. These results are robust to audit partner changes, entropy balancing, and other sensitivity analyses. Moreover, clients of these partners report more conservative financial statements. The qualitative results from 10 semistructured audit partner interviews indicate that audit partners enter the auditing labor market at less prestigious firms due to both internal factors (e.g., late entry into the job market, location preferences) and external factors (e.g., poor market conditions/recessions or lack of Big N recruitment). In fact, their choice to make upward advancements results from both work considerations, such as limited growth opportunities, feeling unchallenged in their previous roles, and the desire to specialize, alongside nonwork considerations, such as audit firm culture and reducing commute/travel time for client work. Taken together, the evidence suggests that these significant upward career transitions represent market corrections of initial auditing labor markets and that such transitions may be of interest to investors, regulators, audit committees, and academics.