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Engagement audit partner experience and audit quality

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  • Xiaoke Wang
  • Yanyan Wang
  • Lisheng Yu
  • Yuping Zhao
  • Zhenyu Zhang

Abstract

We explore Chinese market data to examine the relation between the experience of the engagement audit partner and audit quality. We find a negative association between absolute/income-increasing abnormal accruals and the audit partner experience. In addition, we find investors do care about the experience of the engagement audit partner. The earnings response coefficient is higher for firms audited by more experienced auditors. These results are robust even after controlling for audit firm characteristics. Our findings are consistent with the notion that audit partner experience increases audit quality. We also performed sensitivity tests using the propensity of engagement partners to issue going-concern opinions to financially distressed clients and find consistent results.

Suggested Citation

  • Xiaoke Wang & Yanyan Wang & Lisheng Yu & Yuping Zhao & Zhenyu Zhang, 2015. "Engagement audit partner experience and audit quality," China Journal of Accounting Studies, Taylor & Francis Journals, vol. 3(3), pages 230-253, July.
    • Handle: RePEc:taf:rcjaxx:v:3:y:2015:i:3:p:230-253
    DOI: 10.1080/21697213.2015.1055776
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