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Evidence from Audit Partner Switches on the Effects of Audit Partner Characteristics on Audit Quality

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Date: Wednesday 21 September 2016
Venue: Penang Meeting Room, Swinburne Library, Hawthorn Campus

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The Department of Accounting Economics and Finance invites you to attend our Research Seminar series.

Evidence from Audit Partner Switches on the Effects of Audit Partner Characteristics on Audit Quality

By Professor Ellie Chapple, School of Accountancy, Queensland University of Technology (QUT), Australia


Research into audit outcomes is increasingly recognizing that characteristics of the individual auditor who make the audit-related judgments is a fruitful area for research, and that different markets provide a variety of opportunities to observe and measure auditor characteristics.

By reviewing the recent literature, we find that it predominantly focuses on the following six audit partner characteristics when examining potential audit partner effects on audit quality: (1) industry expertise (2) general experience (3) tenure (4) client importance (5) portfolio size and (6) gender.

We show that the Australian market is an ideal setting to investigate the effect of audit partner characteristics for at least two reasons, the audit partner is identified so data are able to be collected regarding the characteristics and since 2006 Australian auditors have been required to rotate off engagements every 5 years. Hence, the point of the switch of auditors is an interesting setting to observe any changes in audit outcomes – in this paper audit quality is measured alternatively as the issuance of going concern pinions and the level of earnings management in the financial report. Despite using the variety of measures to distinguish audit partners, so far we find little compelling evidence that audit quality is affected by the mandatory rotation of auditors, apart from industry specialization of the auditor. There is some evidence that a switch from a male to female auditr decreases the likelihood of a going concern opinion. Overall, the results provide us with initial insights to further our investigation.

About the speaker

Professor Chapple is a leading international research academic in accounting research. She has had academic roles at the UQ Business School (University of Queensland), the Research School of Accounting (Australian National University) and the QUT Business School (QUT), as well as the TC Beirne School of Law at the University of Queensland. Her extensive and broad knowledge is evidenced by the fact that she has taught, researched and published in the areas of insolvency, commercial law, corporate law, corporate governance and auditing and has researched primarily issues of corporate accountability, reporting and corporate transactions.

Professor Chapple has built a career including:

  • Collaboration with international institutions including the International Accounting Standards Board, London; Victoria University of Wellington, New Zealand; Massey University, New Zealand; The University College Dublin, Ireland; City University of Hong Kong; The University of Antwerp, Belgium, and the James Madison University, Virginia USA.
  • Receiving competitive research funding within her discipline from the leading accounting academic body known as AFAANZ as well as the national Australian Research Council.
  • Building impressive international network of alumni now working at Harvard Law School, Washington University Law School, London School of Economics, City University of Hong Kong, and global investment banks, law firms, accounting firms, consulting firms and charities.
  • Co-editor of Accounting Research Journal (ABDC rank B).

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Contact Information: Dr Sarod Khandaker
Email: Tel: +61 3 9214 8456