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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Partner wealth and audit quality
T2 - evidence from the United States
AU - He, Shaohua
AU - Jiang, John X.
AU - Wang, K. Philip
PY - 2025/3/31
Y1 - 2025/3/31
N2 - Using the market values of audit partners’ houses as a measure of their personal wealth, we fnd that wealthier U.S. partners provide higher-quality audits, as evidenced by fewer material restatements, fewer material SEC comment letters, and higher audit fees. A battery of falsifcation tests shows that these fndings are not driven by the matching of wealthier partners with clients with higher fnancial reporting quality. Our additional analyses suggest two explanations: greater personal wealth both incentivizes partners to exert more efort in delivering high-quality audits and reveals partners’ audit competence
AB - Using the market values of audit partners’ houses as a measure of their personal wealth, we fnd that wealthier U.S. partners provide higher-quality audits, as evidenced by fewer material restatements, fewer material SEC comment letters, and higher audit fees. A battery of falsifcation tests shows that these fndings are not driven by the matching of wealthier partners with clients with higher fnancial reporting quality. Our additional analyses suggest two explanations: greater personal wealth both incentivizes partners to exert more efort in delivering high-quality audits and reveals partners’ audit competence
U2 - 10.1007/s11142-024-09828-6
DO - 10.1007/s11142-024-09828-6
M3 - Journal article
VL - 30
SP - 702
EP - 737
JO - Review of Accounting Studies
JF - Review of Accounting Studies
SN - 1380-6653
IS - 1
ER -