Audit partner style and financial statement comparability: New evidence from the US market

IF 2.2 3区管理学 Q2 BUSINESS, FINANCE

Journal of Business Finance & Accounting Pub Date : 2024-03-21 DOI:10.1111/jbfa.12798

Tracie Frost, Zhijian Chris He, Xin Luo, Derrald Stice

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引用次数: 0

Abstract

We explore the influence of individual audit partner style on financial statement comparability in a US setting using newly available data. We find evidence of an audit partner style effect on comparability incremental to audit firm and audit office effects. Our results are consistent across several comparability measures and are economically significant. For example, the audit partner effect is associated with a 12.59% decrease in the mean difference in abnormal accruals compared with a 4.4% decrease for firm pairs audited by the same Big 4 audit office. We also find that audit partner expertise and experience have a greater influence on comparability than audit office expertise and experience. Our results are consistent in endogeneity and robustness tests including (1) auditor switching tests, (2) entropy balancing, (3) placebo tests and (4) controlling for clients’ economic similarity. Our results suggest that the association between audit partner style and financial statement comparability persists in highly regulatory environments and corroborate the PCAOB's intuition that the role of the engagement partner “is of singular importance” to the outcome of the audit (PCAOB 2011).

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审计合伙人风格与财务报表可比性：来自美国市场的新证据

我们利用新近获得的数据，在美国环境下探讨了审计合伙人个人风格对财务报表可比性的影响。我们发现，除了审计公司和审计办事处的影响外，审计合伙人风格对可比性也有影响。我们的结果在几种可比性衡量标准中都是一致的，并且具有经济意义。例如，审计合伙人效应与异常应计项目平均差异减少 12.59% 相关，而由同一四大审计事务所审计的公司对的异常应计项目平均差异减少 4.4%。我们还发现，审计合伙人的专业知识和经验比审计事务所的专业知识和经验对可比性的影响更大。我们的结果在内生性和稳健性检验中是一致的，这些检验包括：（1）审计师转换检验；（2）熵平衡；（3）安慰剂检验；（4）控制客户的经济相似性。我们的结果表明，审计合伙人风格与财务报表可比性之间的关联在高度监管的环境中依然存在，这也证实了 PCAOB 的直觉，即参与合伙人的角色对审计结果 "至关重要"（PCAOB，2011 年）。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Business Finance & Accounting BUSINESS, FINANCE-

CiteScore

4.40

自引率

17.20%

发文量

期刊介绍： Journal of Business Finance and Accounting exists to publish high quality research papers in accounting, corporate finance, corporate governance and their interfaces. The interfaces are relevant in many areas such as financial reporting and communication, valuation, financial performance measurement and managerial reward and control structures. A feature of JBFA is that it recognises that informational problems are pervasive in financial markets and business organisations, and that accounting plays an important role in resolving such problems. JBFA welcomes both theoretical and empirical contributions. Nonetheless, theoretical papers should yield novel testable implications, and empirical papers should be theoretically well-motivated. The Editors view accounting and finance as being closely related to economics and, as a consequence, papers submitted will often have theoretical motivations that are grounded in economics. JBFA, however, also seeks papers that complement economics-based theorising with theoretical developments originating in other social science disciplines or traditions. While many papers in JBFA use econometric or related empirical methods, the Editors also welcome contributions that use other empirical research methods. Although the scope of JBFA is broad, it is not a suitable outlet for highly abstract mathematical papers, or empirical papers with inadequate theoretical motivation. Also, papers that study asset pricing, or the operations of financial markets, should have direct implications for one or more of preparers, regulators, users of financial statements, and corporate financial decision makers, or at least should have implications for the development of future research relevant to such users.