Audit Quality Effects of an Individual Audit Engagement Partner Signature Mandate

21 Pages Posted: 10 Oct 2014

See all articles by Allen D. Blay

Allen D. Blay

Florida State University

Matthew Notbohm

University of North Dakota

Caren Schelleman

Maastricht University - Department of Accounting & Information Management, MARC (Maastricht Accounting, Auditing & Information Management Research Center)

Adrian Valencia

Florida Gulf Coast University - Department of Accounting, Finance & Business Law

Multiple version iconThere are 2 versions of this paper

Date Written: November 2014

Abstract

The European Union recently mandated that audit engagement partners sign their name to the audit opinion. However, there is little evidence demonstrating whether such a mandate had any influence on audit quality. We examine the audit quality effects of a partner signature mandate by comparing multiple measures of audit quality in years after adoption of an audit partner signature mandate in the Netherlands, a country with no tradition of partner signatures, to the audit quality in years prior to adoption, as well as to the United Kingdom, a country with a similar legal and accounting environment, but which did not adopt partner‐level signatures at the same time. We detect no substantial change in audit quality using multiple measures and sample selection criteria. Although a null result cannot demonstrate that no effect exists, power tests suggest the lack of an economically significant effect. Our results support the arguments of practitioners who believe that mandatory partner signatures will not influence audit quality.

Keywords: Audit quality, mandatory partner‐level signatures, accruals, regulation

Suggested Citation

Blay, Allen Dennis and Notbohm, Matthew and Schelleman, Caren and Valencia, Adrian, Audit Quality Effects of an Individual Audit Engagement Partner Signature Mandate (November 2014). International Journal of Auditing, Vol. 18, Issue 3, pp. 172-192, 2014, Available at SSRN: https://ssrn.com/abstract=2508056 or http://dx.doi.org/10.1111/ijau.12022

Allen Dennis Blay (Contact Author)

Florida State University ( email )

Rovetta Business Bldg. (RBA)
College of Business
Tallahassee, FL 32306-1110
United States
850-727-0953 (Phone)

Matthew Notbohm

University of North Dakota ( email )

Box 8366
Grand Forks, ND 58202
United States

Caren Schelleman

Maastricht University - Department of Accounting & Information Management, MARC (Maastricht Accounting, Auditing & Information Management Research Center) ( email )

PO Box 616
Maastricht, 6200 MD
Netherlands

Adrian Valencia

Florida Gulf Coast University - Department of Accounting, Finance & Business Law ( email )

Ft. Myers, FL 33965-6565
United States

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