The Importance of Partner Narcissism to Audit Quality: Evidence from Taiwan

• 成果类型: Article
• 署名作者: Chou, Ting-Kai; Pittman, Jeffrey A.; Zhuang, Zili
• 署名单位: National Cheng Kung University; National Cheng Kung University; Memorial University Newfoundland; Virginia Polytechnic Institute & State University; Chinese University of Hong Kong
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0420
• 发表日期: 2021
• 页码: 103-127
• 关键词: implicit self-esteem; signature size; big n; earnings; office; acquisitions; perceptions; performance; decisions; accruals

摘要

Relying on the size of partner signatures in audit reports in Taiwan to measure their narcissism, we find that audit quality rises with partner narcissism. Our analysis also implies that changes in audit quality are positively associated with changes in partner narcissism stemming from mandatory partner rotation. We also find that the impact of partner narcissism on audit quality only manifests when auditor independence is more likely to be compromised, although it does not vary with engagement complexity. These results suggest that partner narcissism improves audit quality mainly through increased auditor independence, rather than auditor competence. Additionally, we document that although partner narcissism has no perceptible impact on the incidence of Type I going concern reporting errors, it is negatively associated with the probability of making a Type II error, implying that more narcissistic partners are less likely to succumb to client pressure to issue opportunistic reports.