Audit personnel salaries and audit quality

• 成果类型: Article
• 署名作者: Hoopes, Jeffrey L.; Merkley, Kenneth J.; Pacelli, Joseph; Schroeder, Joseph H.
• 署名单位: University of North Carolina; University of North Carolina Chapel Hill; Indiana University System; Indiana University Bloomington
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-018-9458-y
• 发表日期: 2018
• 页码: 1096-1136
• 关键词: industry expertise; gift exchange; office size; wages; MARKET; fees; determinants; unemployment; fairness; Managers

摘要

This study examines the relation between audit personnel salaries and office-level audit quality. We measure audit personnel salaries at the associate, senior, and manager ranks for Big 4 audit offices from 2004 to 2013, using unique individual-auditor-level data obtained from the U.S. Department of Labor. We find that offices that pay lower salaries have a higher percentage of clients that experience restatements. In related analyses, we also find lower levels of audit quality when audit employees are paid less, relative to other lines of service in accounting firms. Finally, we document positive and significant associations between salary and fees, suggesting that audit offices pass some of the cost of higher labor onto their clients. Overall, our findings provide important initial evidence on the role of audit salary and its relation to audit quality and audit fees.