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RESEARCH PRODUCT
What Dimensions of Lead Auditor Expertise Matter for Audit Quality and Audit Fees?
Christopher KochJürgen ErnstbergerHun-tong Tansubject
Internal auditJoint auditbusiness.industryLead auditorAudit evidenceInformation technology auditChief audit executiveAccountingAudit planBusinessAuditor independencedescription
This study investigates the effects of lead auditors’ technical and managerial knowledge on audit quality and audit fees. The German institutional environment enables us to track auditors over their careers and measure their various personal attributes. We find that lead auditors’ technical knowledge is more important for audit quality than their managerial knowledge; however, their managerial knowledge is a more influential driver of audit fees than their technical knowledge. The results of various identification strategies including firm-fixed effects models, propensity-score matching, and instrumental variables approaches suggest that the observed relations are treatment rather than selection effects. The findings enhance our understanding of the role and nature of expertise in auditing and demonstrate the value of lead auditor identification as currently discussed by the PCAOB and the IAASB.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2015-01-01 | SSRN Electronic Journal |