University of Oulu

Essays on audit quality

Saved in:
Author: Zerni, Mikko1
Organizations: 1University of Oulu, Faculty of Economics and Business Administration, Department of Accounting and Finance
Format: ebook
Version: published version
Access: open
Online Access: PDF Full Text (PDF, 0.6 MB)
Persistent link:
Language: English
Published: 2009
Publish Date: 2009-11-10
Thesis type: Doctoral Dissertation
Defence Note: Academic dissertation to be presented with the assent of the Faculty of Economics and Business Administration of the University of Oulu for public defence in Auditorium TA105, Linnanmaa, on 20 November 2009, at 12 noon
Reviewer: Professor Lasse Niemi
Professor Stefan Sundgren


The only observable outcome of the audit process is normally the issued audit report, which, at least in its standard form, does not contain much information about audit quality (Balsam et al. 2003). Auditor quality is multidimensional and inherently unobservable, and there is no single auditor characteristic that can be used as a proxy for it. In the absence of direct measures for quality, audit consumers must assess the quality by using quality surrogates, or the overall reputation of an auditor (e.g. Shapiro 1983, Riley 2001).

The purpose of this dissertation is to enhance our understanding of the determinants and implications of quality-differentiated audits through four inter-related essays. The findings of the essays shed light on the various ways in which client firms strive to signal high audit and consequent earnings quality. From the supply-side perspective, the essays of this dissertation provide evidence how some (individual) auditors have been able to establish a reputation higher than the generic reputation.

Importantly, this dissertation adds to the ongoing debate about the regulator changes and initiatives in the European Union and the U.S.A. requiring disclosure of engagement partner identity. The rationale behind such a requirement is that it could bring within investors’ reach greater transparency and accountability in the auditing process thereby helping to restore investor confidence in the capital markets. Consistent with this rationale, the results of this dissertation support the view that audit markets (and/or firm insiders) infer audit quality, at least to some extent, from the characteristics of the individual audit partner in charge.

see all

Series: Acta Universitatis Ouluensis. G, Oeconomica
ISSN-E: 1796-2269
ISBN: 978-951-42-9292-7
ISBN Print: 978-951-42-9291-0
Issue: 39
Copyright information: © University of Oulu, 2009. This publication is copyrighted. You may download, display and print it for your own personal use. Commercial use is prohibited.