Diversity of Signing Auditors and Audit Quality

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

6 Scopus Citations
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Author(s)

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Detail(s)

Original languageEnglish
Pages (from-to)27-52
Journal / PublicationAuditing: A Journal of Practice & Theory
Volume40
Issue number3
Online published22 Jan 2021
Publication statusPublished - Aug 2021

Abstract

Using data for listed firms in China, where two auditors sign the audit report, we examine whether the diversity of signing auditors' characteristics affects audit quality. We find a positive association between diversity and audit quality, consistent with the notion that diversity facilitates team performance. Further analyses show there is a stronger association between cognitive, rather than demographic, diversity of signing auditors and audit quality. Our results are robust to the inclusion of client firm and engagement auditor fixed effects. Cross-sectional results indicate stronger effects of the cognitive diversity of signing auditors on audit quality in complex, opaque, less important clients or firms without industry specialist auditors. Findings from our study suggest that audit firms should allocate staff to audit teams in a manner that results in cognitively diverse audit teams because such teams are more likely to deliver high quality audits.

Research Area(s)

  • Signing auditors, Cognitive Diversity, Demographic Diversity, Audit quality

Bibliographic Note

Research Unit(s) information for this publication is provided by the author(s) concerned.

Citation Format(s)

Diversity of Signing Auditors and Audit Quality. / He, Chang; Li, Chao Kevin; Monroe, Gary S. et al.
In: Auditing: A Journal of Practice & Theory, Vol. 40, No. 3, 08.2021, p. 27-52.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review