Auditors Under Fire: The Association between Audit Errors and the Career Setbacks of Individual Auditors
Auditors Under Fire: The Association between Audit Errors and the Career Setbacks of Individual Auditors
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DOI：
10.2139/ssrn.3898922
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发表时间：
2021-08
期刊：
影响因子：
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通讯作者：
Kevin C. W. Chen;Tai-Yuan Chen;Weifang Han;Hongqi Yuan
中科院分区：
文献类型：
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作者：
Kevin C. W. Chen;Tai-Yuan Chen;Weifang Han;Hongqi Yuan
本文探讨了审计师是否以及如何因审计错误而受到纪律处分。利用我国审计师身份数据的长期历史，我们发现，与客户重述签名的审计师很可能失去签署公共客户审计报告的特权。然而，审计师可以通过发布相关的修改审计意见来警告潜在的错误陈述来避免这种后果。此外，如果审计师所在的审计市场不太集中，他们更有可能受到纪律处分。最后，我们发现审计公司对审计师的纪律处分产生了积极的结果。与非惩戒事务所相比，惩戒事务所在客户重述率上有更大幅度的下降，市场份额有更大幅度的增长，其客户在惩戒后有更高的盈余反应系数。总之，我们的研究结果表明，在中国的个人审计师可能会面临不利的职业后果时，他们产生的质量差的审计。
This paper examines whether and how auditors are disciplined for audit errors. Taking advantage of the long history of auditor identity data from China, we find that signing auditors with client restatements are likely to lose the privilege of signing the audit reports of public clients. However, auditors can avoid this consequence by issuing a relevant modified audit opinion to warn the potential misstatement. Further, auditors are more likely to be disciplined when they are located in a less concentrated audit market. Finally, we find positive outcomes from the disciplinary action of audit firms against auditors. In comparison to non-disciplining firms, disciplining audit firms have a larger decrease in the rate of client restatements, a larger increase in market share, and their clients have a higher earnings response coefficient (ERC) after disciplinary action. In summary, our results suggest that individual auditors in China can face adverse career consequences when they produce poor quality audits.