CPAs and Office Audit Quality
44 Pages Posted: 10 May 2017 Last revised: 16 Sep 2021
Date Written: September 16, 2021
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: Suggested Citation