The association between individual audit partners’ risk preferences and the composition of their client portfolios

The association between individual audit partners’ risk preferences and the composition of... We explore whether audit partners’ attitude towards risk, as measured by their personal criminal convictions, are reflected in the composition of their client portfolios. Analyzing a unique dataset of Swedish audit partners’ criminal convictions, we find that the clients of audit partners with criminal convictions are characterized by greater financial, governance, and reporting risk than those of audit partners without criminal convictions. Also, clients of audit partners with criminal convictions pay larger audit fees, on average, than those of auditors without criminal convictions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Accounting Studies Springer Journals

The association between individual audit partners’ risk preferences and the composition of their client portfolios

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Publisher
Springer US
Copyright
Copyright © 2013 by Springer Science+Business Media New York
Subject
Economics / Management Science; Accounting/Auditing; Finance/Investment/Banking; Public Finance & Economics
ISSN
1380-6653
eISSN
1573-7136
D.O.I.
10.1007/s11142-013-9245-8
Publisher site
See Article on Publisher Site

Abstract

We explore whether audit partners’ attitude towards risk, as measured by their personal criminal convictions, are reflected in the composition of their client portfolios. Analyzing a unique dataset of Swedish audit partners’ criminal convictions, we find that the clients of audit partners with criminal convictions are characterized by greater financial, governance, and reporting risk than those of audit partners without criminal convictions. Also, clients of audit partners with criminal convictions pay larger audit fees, on average, than those of auditors without criminal convictions.

Journal

Review of Accounting StudiesSpringer Journals

Published: Sep 4, 2013

References

  • The conservatism principle and asymmetric timeliness of earnings
    Basu, S
  • Some personality correlates of business white-collar crime
    Blickle, G; Schlegel, A; Fassbender, P; Klein, U
  • Audit pricing, legal liability regimes, and Big 4 premiums: Theory and cross-country evidence
    Choi, JH; Kim, JB; Liu, X; Simunic, D
  • An examination of factors affecting audit practice development
    Cohen, JR; Trompeter, GM
  • Gender and varieties of white-collar crime
    Daly, K
  • Behavioral economic analysis of crime: A critical review
    Garoupa, N
  • Sensation seeking, overconfidence and trading activity
    Grinblatt, M; Keloharju, M

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