The Importance of Partner Narcissism to Audit Quality

Posted: 18 Jun 2018

See all articles by Ting-Kai Chou

Ting-Kai Chou

National Cheng-Kung University

Jeffrey Pittman

Memorial University of Newfoundland (MNU) - Faculty of Business Administration

Zili Zhuang

The Chinese University of Hong Kong (CUHK) - Faculty of Business Administration

Date Written: May 27, 2018

Abstract

Relying on the size of partner signatures in audit reports to measure their narcissism, we find that audit quality rises with partner narcissism. Consistent with the intuition that Big Four audit firms with more sophisticated quality control structures and more standardized audit procedures narrow the scope for personality characteristics to affect audit quality, we document that partner narcissism has a larger impact in non-Big Four firms where there are fewer constraints on personality characteristics playing a role. Our evidence is constructive given that Gul et al. (2013) and Cameran et al. (2018) find that although some auditor demographic characteristics matter, the variation in audit outcomes across individual auditors largely remains unexplained. As such, our analysis responds to calls for research on the determinants responsible for inter-partner variation in audit quality. Our research also helps inform the continuing debate over the implications of publicly identifying partners in the U.S. and elsewhere.

Keywords: narcissism, audit quality, audit partners

JEL Classification: M40, M41, M42

Suggested Citation

Chou, Ting-Kai and Pittman, Jeffrey A. and Zhuang, Zili, The Importance of Partner Narcissism to Audit Quality (May 27, 2018). Available at SSRN: https://ssrn.com/abstract=3185866

Ting-Kai Chou

National Cheng-Kung University ( email )

No.1, University Road
Tainan, Taiwan 701
Taiwan
886-6-275-7575 (Phone)

Jeffrey A. Pittman (Contact Author)

Memorial University of Newfoundland (MNU) - Faculty of Business Administration ( email )

St. John's, Newfoundland A1B 3X5
Canada
709-737-3100 (Phone)
709-737-7680 (Fax)

Zili Zhuang

The Chinese University of Hong Kong (CUHK) - Faculty of Business Administration ( email )

Shatin N.T.
Hong Kong

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