Auditor Skill Demands and Audit Quality: Evidence from Job Postings

61 Pages Posted: 6 Jan 2021 Last revised: 6 Jun 2022

See all articles by Charles (Chad) Ham

Charles (Chad) Ham

Washington University in St. Louis - John M. Olin Business School

Rebecca N. Hann

University of Maryland - Robert H. Smith School of Business

MaryJane Rabier

Washington University in St. Louis

Wenfeng Wang

City University of Hong Kong

Date Written: June 3, 2022

Abstract

Recent labor economics research argues that technological advances have increased the demand for cognitive and social skills to complement its use. Given the push to adopt emerging technologies in the audit profession, we examine audit offices’ demand for these skills from their auditors and whether these skills relate to audit quality. Using a novel dataset of online job postings by accounting firms, we document substantial variation in the demand for auditors’ cognitive and social skills both across and within accounting firms, suggesting that audit offices are not homogeneous in their demand for such skills. We find that the demand for auditors’ cognitive and social skills (i) increased over our sample period of 2010-2019 and (ii) is positively associated with audit quality. Further, both of these associations are more pronounced for audit offices that hire more tech-employees and engage more complex clients. Taken together, our findings suggest that an audit office’s demand for cognitive and social skills represents an important attribute that can affect audit quality.

Suggested Citation

Ham, Charles and Hann, Rebecca N. and Rabier, MaryJane and Wang, Wenfeng, Auditor Skill Demands and Audit Quality: Evidence from Job Postings (June 3, 2022). Available at SSRN: https://ssrn.com/abstract=3727495 or http://dx.doi.org/10.2139/ssrn.3727495

Charles Ham (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

Rebecca N. Hann

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

MaryJane Rabier

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Wenfeng Wang

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

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