Audit Partner Identification and Characteristics: Evidence from U.S. Form AP Filings

Burke, Jenna; Hoitash, Rani; Hoitash, Udi

doi:10.2308/ajpt-52320

Cited by 121 publications

(114 citation statements)

References 69 publications

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“…Consistent with prior studies (e.g. Burke et al 2019;Palvia et al 2015), the use of less optimistic language by female audit partners can be justified in view of their risk-averse attitude to reduce their legal liability exposure.…”

Section: The Tone and Readability Of Auditor's Report Analysissupporting

confidence: 73%

Female Audit Partners and Extended Audit Reporting: UK Evidence

2020

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This study investigates whether audit partner gender is associated with the extent of auditor disclosure and the communication style regarding risks of material misstatements that are classified as key audit matters (KAMs). Using a sample of UK firms during the 2013–2017 period, our results suggest that female audit partners are more likely than male audit partners to disclose more KAMs with more details after controlling for both client and audit firm attributes. Furthermore, female audit partners are found to use a less optimistic tone and provide less readable audit reports, compared to their male counterparts, suggesting that behavioural variances between female and male audit partners may have significant implications on their writing style. Therefore, this study offers new insights on the role of audit partner gender in extended audit reporting. Our findings have important implications for audit firms, investors, policymakers and governments in relation to the development, implementation and enforcement of gender diversity.

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Section: The Tone and Readability Of Auditor's Report Analysissupporting

confidence: 73%

Female Audit Partners and Extended Audit Reporting: UK Evidence

2020

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“…They conclude that disclosing engagement partners is associated with higher audit quality (as proxied by more audit effort and less aggressive financial reporting). Likewise, Burke, Hoitash, and Hoitash () found that the audit partner disclosure requirement leads to higher audit fees, higher audit quality, and shorter audit delays. They also indicated that audit partner characteristics, including gender, busyness, education, and social connections, are not associated with audit quality.…”

Section: Background and Prior Researchmentioning

confidence: 98%

Impact of the disclosure of audit engagement partners on audit quality: Evidence from the USA

Dao

Liu

2019

Int J Auditing

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The debate concerning the recent regulation in the USA mandating accounting firms to disclose engagement partners' identity is ongoing. We examine the impact of the Public Company Accounting Oversight Board's (PCAOB's) requirement of disclosing engagement partners' names on Form AP on the quality of audit engagements. Using two measures of audit quality (abnormal accruals and the probability of detecting material weaknesses in internal control), we find that disclosing engagement partners' names is associated with a lower level of abnormal accruals and a higher probability of accounting firms detecting material weaknesses in internal control. Our study extends the contemporary research on the disclosure of engagement partners' identification by providing additional evidence to the literature on this issue in the U.S. setting. Our study also provides evidence supporting the PCAOB's perception that this disclosure leads to higher audit quality.

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“…Hossain et al (2016) finds using Australian evidence that female partners are less likely to issue GCOs for financially distressed firms. Hoitash et al (2019) reports no significant impact of female auditor on discretionary accruals and audit delay, using U.S. evidence.…”

Section: Literature Review: Auditor Gender and Audit Qualitymentioning

confidence: 98%

“…In general, using going concern opinions and abnormal accruals as indicators of audit quality, these studies find mixed evidence that auditor gender affects audit quality. Recently, with the release of engagement lead auditors names by Public Company Accounting Oversight Board (PCAOB), a number of studies have started to examine the relation between auditor gender and audit quality in the U.S. context (Lee, Nagy and Zimmerman 2019;Burke, Hoitash, and Hoitash 2019). However, using abnormal accruals, restatements, and audit delays as proxies for audit quality, these studies also provide mixed evidence that auditor gender affects audit quality.…”

Section: Introductionmentioning

confidence: 99%

“…Second, this study provides evidence of gender difference in audit quality using a different proxy for audit quality, notably accounting conservatism. Recent studies in the U.S. context have focused on abnormal accruals, restatements, and audit delay as proxies for audit quality (Lee et al 2019;Burke et al 2019). Further, prior studies in the international setting have used going-concern opinions and abnormal accruals (Chin and Chi 2008;Hardies, Breesch, and Branson 2016;Hossain, Chapple, and Monroe 2016;and Karjalainen, Niskanen, and Niskanen 2018;Ittonen, Vahamaa and Vahamaa, 2013;Garcia-Blandon, Argiles-Bosh, and Ravenda 2019).…”

Section: Introductionmentioning

confidence: 99%

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Audit Partner Gender and the Reporting of Conservative Earnings

Akono¹

2020

Preprint

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This study examines whether the association between auditor gender and accounting conservatism. We predict that clients audited by female partners will exhibit a different degree of accounting conservatism relative to those audited by male partners because of inherent different levels of risk aversion between men and women. The results obtained using the Basu (1997) measure of accounting conservatism indicate that engagements audited by female audit partners are associated with less conservative earnings than those audited by male audit partners in general. Next, these results vary across client importance and litigation risk. In particular, female auditors are less conservative for clients that are less important to the audit firm, but there is no gender difference in conservatism for more important clients. Further, female auditors are less conservative in low litigation risk settings, but there is no gender difference in conservatism when the threat of legal liability is high. These findings are robust to controlling to the inclusion of various control variables and are supported partially using alternative measures of conservatism and after partial control for potential endogeneity in the choice of the gender of an audit partner. Collectively, the results in this study have the potential to provide additional evidence on the important role audit partner characteristics pay in the production of conservative accounting reports.

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Audit Partner Identification and Characteristics: Evidence from U.S. Form AP Filings

Cited by 121 publications

References 69 publications

Female Audit Partners and Extended Audit Reporting: UK Evidence

Female Audit Partners and Extended Audit Reporting: UK Evidence

Impact of the disclosure of audit engagement partners on audit quality: Evidence from the USA

Audit Partner Gender and the Reporting of Conservative Earnings

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