Partner wealth and audit quality: evidence from the United States

• 成果类型: Article
• 署名作者: Jiang, John Xuefeng; He, Shaohua; Wang, K. Philip
• 署名单位: Michigan State University; Michigan State University's Broad College of Business; Lancaster University; State University System of Florida; University of Florida
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-024-09828-6
• 发表日期: 2025
• 页码: 702-737
• 关键词: industry expertise; CONSEQUENCES; MARKET; OFFICES

摘要

Using the market values of audit partners' houses as a measure of their personal wealth, we find that wealthier U.S. partners provide higher-quality audits, as evidenced by fewer material restatements, fewer material SEC comment letters, and higher audit fees. A battery of falsification tests shows that these findings are not driven by the matching of wealthier partners with clients with higher financial reporting quality. Our additional analyses suggest two explanations: greater personal wealth both incentivizes partners to exert more effort in delivering high-quality audits and reveals partners' audit competence.