Do Engagement Quality Reviewers' Workplace Ties with Engagement Partners Influence Audit Quality?

• 成果类型: Article; Early Access
• 署名作者: Qi, Yue; Seidel, Timothy A.; Zhang, Joseph H.; Zhang, Junsheng
• 署名单位: University of Science & Technology of China, CAS; Chinese Academy of Sciences; University of Science & Technology of China, CAS; Brigham Young University; University System of Ohio; Bowling Green State University; Sun Yat Sen University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456; 1475-679X
• DOI: 10.1111/1475-679x.70060
• 发表日期: 2026-04-16
• 关键词: engagement quality reviewers; engagement quality review; Audit quality; partner assignment; partner industry expertise; auditor independence; pcaob; FIRMS; RISK; INDEPENDENCE; experience; management; KNOWLEDGE; networks; working; IMPACT

摘要

The engagement quality review is a key component of an audit firm's quality control system. This study leverages unique data on individual engagement quality reviewers (EQRs) to examine how previous shared working experience between EQRs and engagement partners affects audit quality. While prior research suggests that within-firm network ties between predecessor and successor partners facilitate knowledge transfer, we find that prior shared working experience between EQRs and engagement partners is associated with lower audit quality. Mechanism tests indicate that such experience is associated with a higher likelihood of regulatory enforcement actions related to deficiencies in audit procedures, insufficient evidence, and a lack of professional skepticism. We also find that such experience corresponds with higher materiality thresholds, suggesting reduced scrutiny during audit planning and execution. Additional analyses reveal that these adverse effects primarily arise when previous shared working relationships did not produce adverse outcomes, when EQRs are not audit industry leaders, and when they face lower reputational risk. These findings are especially salient given that EQRs' previous shared working experience with engagement partners appears to weigh heavily in EQR assignments. Overall, our study provides important insights into the implications of EQR independence and the determinants of engagement quality review effectiveness.