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https://ssrn.com/abstract=1304953
 
 

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The Effects of Audit Partner Pre-Client and Client-Specific Experience on Audit Quality and on Perceptions of Audit Quality


Wuchun Chi


National Chengchi University (NCCU) - Department of Accounting

Linda A. Myers


University of Tennessee, Haslam College of Business, Accounting and Information Management

Thomas C. Omer


University of Nebraska at Lincoln - School of Accountancy

Hong Xie


University of Kentucky - Von Allmen School of Accountancy

October 1, 2016


Abstract:     
We examine the associations between audit partner pre-client and client-specific experience and audit quality using data from Taiwan, where signing audit partner names are disclosed. Using discretionary accruals and interest rate spreads to proxy for audit quality and perceptions of audit quality, respectively, we find that both pre-client and client-specific experience improve audit quality and creditor perceptions of audit quality. We also find that audit partner pre-client experience is positively associated with audit quality early in the engagement, but not when the partner has been with the client for at least five years. Our findings provide evidence consistent with the assumption underlying the Public Company Accounting Oversight Board’s decision to require the disclosure of engagement partner names. They also suggest that pre-client experience cannot completely mitigate the loss of client-specific knowledge when partner or audit firm turnover occurs. 

Number of Pages in PDF File: 45

Keywords: Audit Partner Experience, Audit Quality, Discretionary Accruals, Interest Rate Spreads, Auditor Tenure

JEL Classification: M49, M41, M43, M47, G12


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Date posted: November 21, 2008 ; Last revised: October 7, 2016

Suggested Citation

Chi, Wuchun and Myers, Linda A. and Omer, Thomas C. and Xie, Hong, The Effects of Audit Partner Pre-Client and Client-Specific Experience on Audit Quality and on Perceptions of Audit Quality (October 1, 2016). Available at SSRN: https://ssrn.com/abstract=1304953 or http://dx.doi.org/10.2139/ssrn.1304953

Contact Information

Wuchun Chi
National Chengchi University (NCCU) - Department of Accounting ( email )
No. 64, Sec 2
Chih-Nan Road
Wenshan 116, Taipei
Taiwan
886-2-29393091-81031 (Phone)
886-2-29387113 (Fax)
HOME PAGE: http://www3.nccu.edu.tw/~wchi/
Linda A. Myers (Contact Author)
University of Tennessee, Haslam College of Business, Accounting and Information Management ( email )
Knoxville, TN
United States
Thomas C. Omer
University of Nebraska at Lincoln - School of Accountancy ( email )
307 College of Business Administration
Lincoln, NE 68588-0488
United States
Hong Xie
University of Kentucky - Von Allmen School of Accountancy ( email )
Lexington, KY 40506
United States
(859) 257-4648 (Phone)
(859) 257-3654 (Fax)
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