Do Individual Auditors Affect Audit Quality? Evidence from Archival Data

By Ferdinand A. Gul, Donghui Wu, Zhifeng Yang. 2012

673 citations recorded by the source corpus.

ABSTRACT: We examine whether and how individual auditors affect audit outcomes using a large set of archival Chinese data. We analyze approximately 800 individual auditors and find that they exhibit significant variation in audit quality. The effects that individual auditors have on audit quality are both economically and statistically significant, and are pronounced in both large and small audit firms. We also find that the individual auditor effects on audit quality can be partially explained by auditor characteristics, such as educational background, Big N audit firm experience, rank in the audit firm, and political affiliation. Our findings highlight the importance of scrutinizing and understanding audit quality at the individual auditor level. Data Availability: Data used in this study are publicly available from the sources described herein.

Subfields: Accounting, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/e8c79d973b04b6670c9a9f49c4bd945d4508f1e5

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Citations in the corpus

The Effect of Audit Experience on Audit Fees and Audit Quality (2015, methodology): “We define experience as overall auditor experience which is important because, as Gul et al. (2013) note, the Big N have relatively small market shares in China. Finally, we also consider how auditor experience affects the price of an audit while Gul et al. (2013) do not.”
The Effect of China's Weak Institutional Environment on the Quality of Big 4 Audits (2015, neutral): “Prior research finds that experienced partners provide higher-quality audits in China (Gul, Wu, and Yang 2013; Lennox, Wu, and Zhang 2013).”
Do Social Ties between External Auditors and Audit Committee Members Affect Audit Quality (2016, background): “For example, regulatory sanctions for discovered audit failures are always imposed on the individual signatory auditors involved (Chen et al. 2010; Gul et al. 2013).”
Is the effect of industry expertise on audit pricing an office-level or a partner-level phenomenon? (2014, positive): “Using partner-level data, recent studies find that audit outcomes vary across partners, suggesting that partners’ incentives and expertise could differ from those of the firm and the office (Carey and Simnett 2006; Chen et al. 2008, 2010; Chi et al. 2012; Gul et al. 2013).”
Does the identity of engagement partners matter? An analysis of audit partner reporting decisions (2015, background): “partner (Carey and Simnett 2006; Chen, Lin, and Lin 2008; Chi et al. 2009; Zerni 2012; Gul et al. 2013).”
The effect of audit adjustments on earnings quality: Evidence from China (2016, methodology): “…2011), Chi et al. (2009), Chung and Kallapur (2003), Francis and Wang (2008), Francis and Yu (2009), Francis et al. (2013), Frankel et al. (2002), Gul et al. (2009, 2013), Larcker and Richardson (2004), Menon and Williams (2004), Myers et al. (2003), Reichelt and Wang (2010), Reynolds and…”
Globalisation, accounting and developing countries (2017, background): “Even when local academics use local data they must still meet institutional pressures to publish in highly ranked international accounting (primarily Northern) journals (Gul et al., 2013; Teoh & Zhang, 2011) that can be ignorant or unsympathetic to research issues and problems in DCs.”
What Is the Relationship Between Audit Partner Busyness and Audit Quality (2016, background): “Similarly, there is substantial heterogeneity in audit outcomes across individual auditors (Gul et al. 2013).”
Big N Auditors and Audit Quality: New Evidence from Quasi-Experiments (2019, neutral): “, Gul et al. 2013; Ke, Lennox, and Xin 2015). 5 Healy and Lys (1986) collect firms’ financial information from 10-K filings and Moody’s Industrial, Finance, or Over-the-Counter Manuals.”
Do school ties between auditors and client executives influence audit outcomes (2016, positive): “Following prior China-related auditing research (e.g., DeFond et al., 2000; Gul et al., 2013), we define modified opinions to include adverse,”