Audit partner industry specialization and audit quality: Evidence from Spain

García-Blandón, Josep; Argilés, Josep M.

doi:10.1111/ijau.12107

Cited by 23 publications

(17 citation statements)

References 54 publications

(157 reference statements)

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“…For example, Lobo (2017) and Piot (2010) reported less or no transparency for firms audited by a Big 4 pair, suggesting that the competence and independence of a single Big 4 auditor are sufficient to ensure high audit quality. Recently, Garcia-Blandon and Argiles-Bosch (2018) investigated the impact of the industry specialization of individual auditors on audit quality. Using a sample of Spanish listed companies for the period between 2005 and 2013, they found that the industry specialization of audit partners has no effect on audit quality.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Audit quality, political connections and information asymmetry: evidence from banks in gulf co-operation council countries

Tessema

2020

IJMF

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PurposeThe purpose of this paper is to investigate the impact of audit quality on information asymmetry for a sample of leading listed local banks in the Gulf Cooperation Council (GCC). In addition, the paper examines whether a firm's political connections moderate the association between audit quality and information asymmetry.Design/methodology/approachThe author employs country fixed effects to examine the impact of audit quality on information asymmetry. The paper uses a sample of 49 leading listed local banks across the GCC and 236 bank-year observations, over the period of 2012–2016.FindingsUsing trading volume, trade value and stock return volatility as proxies for information asymmetry and audit quality through auditors' opinion and audit size, the paper documents that audit quality plays an important role in improving the quality of financial information reporting by providing greater independent assurance of the credibility of financial reports. The paper also documents that a firm's political connections have no effect on the association between audit quality and information asymmetry, indicating that the beneficial effects of audit quality are no greater for politically connected firms than for similar but politically unconnected firms.Practical implicationsThe findings of the study help policymakers, standard-setters and regulators to understand the potential adverse effect of political connections on the role of audit quality on information asymmetry. The study also provides important insights for audit regulators to better identify and understand the benefits of audit quality and to take policy matters that influence audit quality seriously.Originality/valueThe study increases our understanding of the impact of audit quality on the level of information asymmetry in different economic, legal and political institutions, regulatory and litigation incentives and social contexts compared to that of research conducted using data collected from developed and other emerging countries. This will help to widen our knowledge on the role of audit quality on information asymmetry across the globe.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Audit quality, political connections and information asymmetry: evidence from banks in gulf co-operation council countries

Tessema

2020

IJMF

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“…Given the upsurge regulatory interest about the mandatory publication of the APS' names, an increasingly growing number of studies have linked audit quality with a large set of APS attributes such as industry specialization (e.g. Zerni, 2012;Garcia-Blandon and Argiles-Bosch, 2018), tenure (e.g. Laurion et al, 2017;Sharma et al, 2017), workload (e.g.…”

Section: Introductionmentioning

confidence: 99%

Audit partner workload, gender and audit quality

Mnif

Cherif

2022

JAAR

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PurposeThe paper aims to investigate the relation between the auditor's workload (LogAPW) and audit quality. Further, it explores whether the presence of a female audit partner (hereafter FEM) influences the LogAPW effect on audit quality.Design/methodology/approachA dataset of 1,629 firm-year observations from 181 companies listed in the NASDAQ OMX Stockholm for the years 2010–2018 has been analyzed. The testable hypotheses have been tested using least squares regressions clustered at the Swedish public-listed companies (client-firm) level.FindingsThe research findings first indicate that overburdened audit partners (APS) are associated with lower-quality audits, consistent with the “busyness hypothesis.” Nevertheless, the adverse association turns to be positive for FEMs, supporting the thesis that FEMs have more tendency, as compared to their male counterparts, to preserve their partnership's position in the public-audit firms. Collectively, these results seem sound, as the results hold unchanged after controlling for the endogeneity concerns and provide the same conclusion for a host of additional measures for both the client-firms' discretionary accruals and the LogAPW.Research limitations/implicationsEven though a lower magnitude of the client-firms' discretionary accruals corresponds to a lower-opportunistic behavior of managers, the research is limited to by which lower values of earnings management reflect a better-quality financial reporting. Given that the empirical analysis has been confined to the Swedish Corporation, the regression results might not be generalizable for other countries with different contextual features.Practical implicationsThe study might participate to the ongoing debate about the introduction of more women to the public-audit firms' elite positions (e.g. partnership) by providing evidence for the favorable female auditor effect on the quality of the client-firms' financial reporting.Originality/valueThe regression results provide a preliminary evidence on how does the presence of a FEM mitigate the inverse relation between the LogAPW and audit quality, which is an issue that has not been examined before.

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“…Chen et al (2010) and T. C. Huang et al (2016) that use Chinese data for analyses and those obtained in Garcia-Blandon and Argiles-Bosch (2016) that use Spanish data. Similarly, we find that the board governance and the audit committee (as captured by IND_DIR, Meeting , and Audit_COM ) seem not having significant impact on client restatement, which is nevertheless similar to the findings of Beasley (1996) and Peasnell et al (2005) that, respectively, use financial statement fraud identified by SEC sanctions and abnormal accruals to capture the impact of board governance on financial reporting quality.…”

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confidence: 99%

Does Availability of Audit Partners Affect Audit Quality? Evidence From China

Lo¹,

Lin²,

Wong

2019

Journal of Accounting, Auditing & Finance

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In this study, we examine whether Chinese Certified Public Accountant (CPA) firms with more partners available to perform audit engagements deliver higher quality services. Based on a sample of 2,990 company-year observations over the period of 2002 to 2015, we find that CPA firms with smaller staff–partner ratios are associated with a lower likelihood of restatements of their clients’ financial statements. Interestingly, we find that this association is less evident when engagement partners have excessive workloads, suggesting the need to balance workloads across partners within a firm. Overall, our results highlight the importance of considering partner availability and its impacts on audit quality, which echo regulators’ growing concern about the inadequate mix of audit experience, expertise, and supervision within CPA firms. Our study is timely and the results are informative to the recent policy debate. From a public policy perspective, our results suggest that CPA firms should be required to disclose information about the deployment of audit partners to help financial statement users make inferences about the quality of their work.

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Audit partner industry specialization and audit quality: Evidence from Spain

Cited by 23 publications

References 54 publications

Audit quality, political connections and information asymmetry: evidence from banks in gulf co-operation council countries

Audit quality, political connections and information asymmetry: evidence from banks in gulf co-operation council countries

Audit partner workload, gender and audit quality

Does Availability of Audit Partners Affect Audit Quality? Evidence From China

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