Individual Auditor Turnover and Audit Quality – Large Sample Evidence from U.S. Audit Offices

Download This Paper Open PDF in Browser Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Individual Auditor Turnover and Audit Quality – Large Sample Evidence from U.S. Audit Offices 59 Pages Posted: 21 Jun 2022 See all articles by Tao MaTao MaRawls College of Business, Texas Tech UniversityChi WanUniversity of Massachusetts Boston - Department of Accounting and FinanceYakun WangThe Chinese University of Hong Kong, Shenzhen - School of Management and Economics; Shenzhen Finance InstituteYuping ZhaoUniversity of Houston Date Written: June 9, 2022 Abstract We examine the relationship between audit quality and audit-office level individual auditor turnover in the U.S. Using resumes of over 65,000 auditors from Indeed.com, we find that audit offices with higher turnover have a greater likelihood of annual report restatements by clients, and are more likely to fail to detect material weakness in clients' internal controls over financial reporting. The detrimental effect of auditor turnover is mainly attributable to the departure of auditors with 4-8 years' experience, and is more pronounced for less important clients, for engagements with long auditor tenure, and for large offices. Our results are robust to using outside job opportunities as an instrument variable and alternative measures of audit quality. Our findings directly inform the current policy debate initiated by the PCAOB on whether disclosures of audit quality indicators, particularly auditor turnover, will help investors better evaluate audit quality. Keywords: Auditor turnover, audit quality, audit quality indicators, financial restatements, audit fees Suggested Citation: Suggested Citation Ma, Tao and Wan, Chi and Wang, Yakun and Zhao, Yuping, Individual Auditor Turnover and Audit Quality – Large Sample Evidence from U.S. Audit Offices (June 9, 2022). Available at SSRN: https://ssrn.com/abstract=4132534 Tao Ma Rawls College of Business, Texas Tech University ( email ) Box 42101Lubbock, TX 79409-2101United States Chi Wan University of Massachusetts Boston - Department of Accounting and Finance ( email ) Boston, MA 02125United States Yakun Wang The Chinese University of Hong Kong, Shenzhen - School of Management and Economics ( email ) 2001 Longxiang Road, Longgang DistrictShenzhen, 518172China Shenzhen Finance Institute ( email ) Yuping Zhao (Contact Author) University of Houston ( email ) 334 Melcher HallHouston, TX 77204United States713-743-2166 (Phone)713-743-4828 (Fax) Download This Paper Open PDF in Browser Do you have a job opening that you would like to promote on SSRN? Place Job Opening Paper statistics Downloads 93 Abstract Views 223 rank 378,183 PlumX Metrics Related eJournals S&P Global Market Intelligence Research Paper Series Follow S&P Global Market Intelligence Research Paper Series Subscribe to this free journal for more curated articles on this topic FOLLOWERS 2,507 PAPERS 36,440 Auditing eJournal Follow Auditing eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 1,796 PAPERS 2,226 This Journal is curated by: Mark F. Zimbelman at Brigham Young University Feedback Feedback to SSRN Feedback (required) Email (required) Submit If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday. Submit a Paper Section 508 Text Only Pages SSRN Quick Links SSRN Solutions Research Paper Series Conference Papers Partners in Publishing Jobs & Announcements Newsletter Sign Up SSRN Rankings Top Papers Top Authors Top Organizations About SSRN SSRN Objectives Network Directors Presidential Letter Announcements Contact us FAQs Copyright Terms and Conditions Privacy Policy We use cookies to help provide and enhance our service and tailor content. To learn more, visit Cookie Settings. This page was processed by aws-apollo4 in 0.195 seconds