Mandatory Disclosure of Audit Engagement Partners: Insights from Practice

33 Pages Posted: 1 Sep 2016 Last revised: 5 Sep 2019

See all articles by Veena L Brown

Veena L Brown

University of Wisconsin-Milwaukee

Jodi L. Gissel

University of Wisconsin - Whitewater

Adam Vitalis

University of Waterloo - School of Accounting and Finance

Date Written: August 15, 2019

Abstract

This study examines the effects of new mandates that require public identification of audit engagement partners in the U.S. and Canada on audit quality and on partners’ perceptions of accountability. Using semi-structured interviews, we solicit practicing Canadian audit partners’ perceptions of the regulation. We find partners believe they are reaching or already at a ceiling level of accountability. The partners do not believe the transparency of publicly identifying them as audit engagement partners will increase audit quality. The partners express less concern over managing external reputations than managing internal reputations, which they believe have a more direct impact on their careers. We conclude that while the regulation should increase audit quality from a theoretical perspective, increasing audit engagement partners’ transparency is unlikely to impact quality on a practical level. Our study suggests that regulators and researchers must consider the aggregate impact of multidimensional accountability pressures and highlights the need for future research to better understand the boundary conditions between accountability and audit quality.

Keywords: audit engagement partner disclosure, audit quality, reputation building, reporting transparency, risk acceptance behavior

Suggested Citation

Brown, Veena L and Gissel, Jodi Lynn and Vitalis, Adam, Mandatory Disclosure of Audit Engagement Partners: Insights from Practice (August 15, 2019). Available at SSRN: https://ssrn.com/abstract=2831730 or http://dx.doi.org/10.2139/ssrn.2831730

Veena L Brown

University of Wisconsin-Milwaukee ( email )

Lubar School of Business
3202 N. Maryland Ave.
Milwaukee, WI 53211
United States
414-229-4471 (Phone)
414-229-5999 (Fax)

Jodi Lynn Gissel

University of Wisconsin - Whitewater ( email )

800 W. Main
Whitewater, WI 53190
United States

Adam Vitalis (Contact Author)

University of Waterloo - School of Accounting and Finance ( email )

University of Waterloo
200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada
2263382264 (Phone)

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