The Importance of Partner Narcissism to Audit Quality
Posted: 18 Jun 2018
Date Written: May 27, 2018
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: Suggested Citation