Kallunki, J., Kallunki, J.-P., Niemi, L., Nilsson, H. and Aobdia, D. (2019), IQ and Audit Quality: Do Smarter Auditors Deliver Better Audits?. Contemp Account Res, 36: 1373-1416. https://doi.org/10.1111/1911-3846.12485
IQ and audit quality : do smarter auditors deliver better audits?
|Author:||Kallunki, Jenni1; Kallunki, Juha-Pekka1,2,3; Niemi, Lasse2;|
1University of Oulu
3Stockholm School of Economics
|Online Access:||PDF Full Text (PDF, 0.6 MB)|
|Persistent link:|| http://urn.fi/urn:nbn:fi-fe2021090144963
John Wiley & Sons,
|Publish Date:|| 2021-09-01
This study examines the role of an individual auditor’s cognitive ability in delivering high-quality audits. Our results from analyzing archival data from Sweden show that audit partners’ IQ scores obtained from psychological tests are positively associated with going-concern audit reporting accuracy and audit fee premiums. We also find some, albeit weak, evidence that audit partners’ IQ scores are negatively associated with the income-increasing abnormal accruals of the client. These results suggest that, although audit services are standardized through various control mechanisms and audits are conducted by teams rather than by individual auditors, the cognitive ability of audit partners responsible for an audit remains important in delivering high-quality audit services.
Contemporary accounting research
|Pages:||1373 - 1416|
|Type of Publication:||
A1 Journal article – refereed
|Field of Science:||
512 Business and management
Marcus Wallenberg Research Foundation, OP Group Research Foundation, Tauno Tönning Foundation, Suomen Arvopaperimarkkinoiden Edistämissäätiö, Finnish Cultural Foundation, and Academy of Finland (Project #277055) for financial support.
|Academy of Finland Grant Number:||
277055 (Academy of Finland Funding decision)
© CAAA. This is the peer reviewed version of the following article: Kallunki, J., Kallunki, J.-P., Niemi, L., Nilsson, H. and Aobdia, D. (2019), IQ and Audit Quality: Do Smarter Auditors Deliver Better Audits?. Contemp Account Res, 36: 1373-1416, which has been published in final form at https://doi.org/10.1111/1911-3846.12485. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.