Auditor University Education: Does it Matter?

Forthcoming

52 Pages Posted: 3 May 2019 Last revised: 23 Nov 2020

See all articles by Jenny Chu

Jenny Chu

University of Cambridge - Judge Business School

Annita Florou

Bocconi University

Peter F. Pope

Bocconi University; London School of Economics and Political Science

Date Written: November 23, 2020

Abstract

We examine the implications of auditor education for audit quality and audit pricing. We exploit a novel institutional setting in the UK, where auditors major in many different degrees at university and signing auditors are identifiable. Using hand-collected data for a large sample of signing auditors, we establish two main findings. First, auditors whose degrees have a quantitative orientation are associated with higher accruals quality and higher audit fees than those with more qualitative degrees. Second, auditors with degrees directly relevant to accounting are also associated with higher accruals quality and increased audit fees relative to auditors with unrelated university degrees in qualitative subjects. Overall, our study provides evidence that heterogeneity in auditor education is associated with divergent audit outcomes.

Keywords: audit partners; education; audit quality; audit fees

JEL Classification: M41; M42; K42

Suggested Citation

Chu, Jenny and Florou, Annita and Pope, Peter F., Auditor University Education: Does it Matter? (November 23, 2020). Forthcoming, Available at SSRN: https://ssrn.com/abstract=3364386 or http://dx.doi.org/10.2139/ssrn.3364386

Jenny Chu

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

Annita Florou (Contact Author)

Bocconi University ( email )

Via Roentgen 1
Milan, 20136
Italy

HOME PAGE: http://faculty.unibocconi.eu/annitaflorou/

Peter F. Pope

Bocconi University ( email )

Dept of Accounting
Milan, 20136
Italy

London School of Economics and Political Science ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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