CPAs and Office Audit Quality

44 Pages Posted: 10 May 2017 Last revised: 16 Sep 2021

See all articles by Albert Nagy

Albert Nagy

John Carroll University - Boler School of Business

Matthew Sherwood

University of Massachusetts Amherst - Isenberg School of Management

Ally Zimmerman

Florida State University - Department of Accounting

Date Written: September 16, 2021

Abstract

We examine the association between office professionally qualified human capital and audit quality. Using hand-collected data on Big 4 audit firm office CPA levels from 30 U.S. cities, we find that offices with relatively more professionally qualified human capital deliver higher quality audits, with this benefit being somewhat more pronounced for audits performed during the busy season than for non-busy season audits. The results underscore the importance of the availability of professionally qualified human capital in audit offices to the office’s audit quality. This study contributes to the literature on office-level audit quality indicators (AQIs) and audit firm human capital.

Keywords: audit firm human resources capacity, audit workload, audit quality, audit report lag, audit office characteristics

JEL Classification: M42

Suggested Citation

Nagy, Albert and Sherwood, Matthew and Zimmerman, Aleksandra, CPAs and Office Audit Quality (September 16, 2021). Available at SSRN: https://ssrn.com/abstract=2965292 or http://dx.doi.org/10.2139/ssrn.2965292

Albert Nagy

John Carroll University - Boler School of Business ( email )

University Heights, OH 44118-4581
United States

Matthew Sherwood

University of Massachusetts Amherst - Isenberg School of Management ( email )

Amherst, MA 01003-4910
United States

Aleksandra Zimmerman (Contact Author)

Florida State University - Department of Accounting ( email )

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

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