Does practitioner research help auditors to provide higher audit quality and generate higher audit fees?

Posted: 18 Mar 2016 Last revised: 26 Aug 2021

See all articles by Benedikt Downar

Benedikt Downar

Technische Universität München (TUM)

Jürgen Ernstberger

Technische Universität München

Christopher Koch

Johannes Gutenberg University Mainz - Gutenberg School of Economics and Management

Martin Prott

Technical University of Munich

Date Written: January 31, 2021

Abstract

This paper investigates whether auditors engaging in practitioner research by writing professional articles and books subsequently provide higher audit quality and generate higher audit fees. Based on theories of constructivist learning and evidence-based management, we argue that engaging in practitioner research helps auditors to acquire expertise relevant for performing the audit. Further, we predict that this engagement also contributes to the development of auditors’ reputation, enabling the auditor to negotiate higher audit fees. We use the German setting for our empirical study as it is common for German auditors to write professional articles and books for historical reasons. Our results are consistent with our expectations. They remain robust when controlling for innate lead auditor abilities and the match between the lead auditor and the client.

Keywords: auditor expertise; audit quality; restatements; audit fee

JEL Classification: M40, M42

Suggested Citation

Downar, Benedikt and Ernstberger, Jürgen and Koch, Christopher and Prott, Martin, Does practitioner research help auditors to provide higher audit quality and generate higher audit fees? (January 31, 2021). Available at SSRN: https://ssrn.com/abstract=2749411 or http://dx.doi.org/10.2139/ssrn.2749411

Benedikt Downar

Technische Universität München (TUM) ( email )

Arcisstrasse 21
Munich, DE 80333
Germany

Jürgen Ernstberger (Contact Author)

Technische Universität München ( email )

Arcisstraße 21
Munich, 80333
Germany

Christopher Koch

Johannes Gutenberg University Mainz - Gutenberg School of Economics and Management ( email )

Mainz
Germany
+49 (6131) 3929990 (Phone)

HOME PAGE: http://https://www.cg.bwl.uni-mainz.de/

Martin Prott

Technical University of Munich ( email )

Arcisstrasse 21
Munich, DE 80333
Germany

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