Audit partner identification and audit quality

• 成果类型: Article
• 署名作者: Lee, Kyungha Kari; Levine, Carolyn B.
• 署名单位: Rutgers University System; Rutgers University Newark; Rutgers University New Brunswick; University of Delaware
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-020-09533-0
• 发表日期: 2020
• 页码: 778-809
• 关键词: pcaob; disclosure; benefits; MARKETS

摘要

This paper studies the effects of disclosing the audit engagement partner's identity on individual and partnership incentives and overall audit quality. We model a collective decision problem, incorporating individual engagement partners' preferences with the partnership's choice of internal quality control. In our model, disclosure of the individual engagement partner (on Form AP) influences the probability that clients observe individual partners' past performance. While Form AP disclosure increases individual partners' incentives to provide high-quality audits for a given level of internal quality control within the partnership, it may simultaneously decrease the partnership's incentives to maintain good internal quality control systems, leading to a net degradation in audit quality. Our paper also demonstrates that the level of external audit oversight is critical in determining whether Form AP disclosure enhances audit quality.