Audit Partner Busyness and Audit Quality
March 30, 2011
I examine the relation between the number of audits done by a partner in a year (partner busyness) and audit quality for a large sample of Australian firms over the period 2002 to 2009. I document a temporal increase in partner busyness and I find that the relation between partner busyness and audit quality is nonlinear. As partners become busier, they have a lower propensity to issue going concern opinions to distressed clients and their clients have larger positive discretionary accruals and lower audit fees, consistent with the detrimental effects of busyness. From partner busyness levels of 23 to 28, each of these relations diminishes, consistent with partners exerting more effort when busyness is high. I also find that this nonlinearity is only observed in recent years when partner busyness is highest.
Number of Pages in PDF File: 52
Keywords: audit partner busyness, audit quality, audit effort
JEL Classification: M41, M42, M51working papers series
Date posted: April 5, 2011 ; Last revised: October 13, 2012
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